LIBRARY   OF 

ALLEN  KNIGHT 

CERTIFIED  PUBLIC  ACCOUNTANT 

502  California  Street 

SAN     FRANCISCO.     CALIFORNIA 


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Bank  Laws 

(Fourth  Edition) 

Bank  Act  of  California  as  Amended. 

Public  Deposit  Acts  of  California 
as  Amended. 

Investment  Companies  Act  of  California. 

National  Bank  Act  as  Amended. 

Currency  Act  of  March  14,  1900. 

Additional  Circulation  Act. 

Postal  Savings  Bank  Act. 

New  York  Savings  Bank  Law. 

COMPILED  BY 

N.  W.  HALSEY  &  COMPANY 

SAN  FRANCISCO 
1913 

C?A\* 


COPYRIGHTED  19 14 

N.  W.  HALSEY  &  COMPANY 

424  CALIFORNIA  STREET 
San  Francisco,  Cal. 


Fourth  Edition 


\j 


3o'/e  &  fBraJen  Comparts 

'Printers 

San  Francisco,  California 

1913 


Pref 


ace 

This  Fourth  Edition  of  our  compilation  of  "Bank  Laws"  is 
designed  to  give  in  compact  and  convenient  form  the  latest  revisions 
of  the  Statutes,  both  National  and  State,  which  affect  the  bond 
holdings  of  California  banks.  The  two  principal  Statutes  presented 
are  the  California  Bank  Act,  as  revised  at  the  1913  Session  of 
the  State  Legislature,  which  Act  applies  to  Commercial  Banks, 
Savings  Banks  and  Trust  Companies  doing  business  in  California, 
and  the  National  Bank  Act,  as  amended  to  date,  which  governs 
the  operations  of  National  Banks.  In  order  to  add  to  the  reference 
value  of  the  book,  we  have  carefully  annotated  these  Statutes, 
having  the  parts  of  the  law  referring  specifically  to  bonds  printed 
in  black  faced  type. 

Other  California  laws  included  are  the  Public  Deposit  Acts 
and  the  Investment  Companies  Act.  Statutes  permitting  the  deposit 
of  State  and  other  public  funds  in  banks  against  the  pledge  of 
State  or  Municipal  bonds  were  first  passed  at  the  1907  Session 
of  the  Legislature.  These  statutes  have  unquestionably  added  to 
the  attractiveness  of  public  bonds,  State  and  Municipal,  as  a 
reserve  holding  for  banks.  The  principle  of  these  laws  appears  to  be 
sound  and  will  probably  remain  a  part  of  the  permanent  policy  of  the 
State.  The  Investment  Companies  Act,  or  "Blue  Sky  Law",  as  it 
is  popularly  termed,  enacted  at  the  1913  Session  of  the  California 
Legislature,  is  somewhat  of  an  innovation.  This  law  provides  for 
a  State  regulation  of  public  offerings  of  bonds  and  stocks,  and  is 
designed  primarily  to  prevent  the  sale  of  unsafe  or  fraudulent 
securities  to  inexperienced  investors.  It  is  hoped  that  this  Law 
will  prove  beneficial  to  conservative  dealers  in  investment  securities, 
through  the  elimination  of  unscrupulous  competition,  but  until  a 
thorough  test  is  made  of  its  operation  and  the  operation  of  similar 
statutes  recently  enacted  in  other  states,  it  will  be  impossible  to 
judge  with  any  accuracy  the  practical  effect  of  this  legislation. 

Among  the  National  statutes  included  in  this  volume  are  the 
Postal  Savings  Bank  Law,  enacted  by  the  Sixty-First  Congress, 
which  provides   for  the  deposit  of  65%    of   any  savings   deposits 


380306 


received  by  the  Postal  authorities  with  banks  in  the  locality  where 
the  money  is  collected,  against  the  pledge  of  "Public  Bonds"  and 
the  Additional  Circulation  Act,  or  "Emergency  Currency  Act", 
as  it  is  popularly  called.  This  latter  Act  expires  by  its  terms 
June  30,  1914,  and  is  not  likely  to  be  re-enacted  in  its  present 
form.  It  seems  probable  that  either  at  the  special  Session  of  Congress, 
in  session  as  we  go  to  press,  or  at  the  regular  Session  of  the  Sixty- 
Third  Congress,  which  convenes  in  December,  an  important 
revision  of  the  National  fiscal  system  will  be  made.  The  uncer- 
tainties attending  this  proposed  legislation  are  so  great,  however, 
that  we  do  not  feel  justified  in  postponing  on  its  account  the 
publication  of  this  edition,  containing  the  important  recent  amend- 
ments to  the  California  Bank  Act. 

To  the  foregoing  statutes  are  added  extracts  from  the  New 
York  Savings  Bank  Law,  defining  the  character  of  bonds  which 
may  be  purchased  and  held  by  savings  banks  in  that  State,  which 
are  mutual  institutions  without  capital  stock  rigidly  restricted  as  to 
the  character  of  their  investments. 

These  extracts  are  included,  first,  because,  on  account  of  the 
importance  and  scientific  character  of  the  New  York  law,  it  is 
reasonable  to  expect  a  gradual  development  of  bank  laws  in  other 
states  along  the  lines  established  in  it,  and  second,  because  the  prestige 
and  market  standing  attaching  to  a  bond  which  satisfies  the  require- 
ments of  the  New  York  Savings  Bank  Law,  is  such  as  to  make  the 
question  of  whether  or  not  securities  conform  to  this  law  of  importance 
to  bankers  generally. 

This  compilation  has  been  made  by  our  Statistical  Department, 
which  aims  to  keep  on  file,  available  for  the  inspection  of  bankers  and 
other  investors,  official  data  relative  to  banking  and  investment  matters. 
Upon  request  we  shall  gladly  furnish  detailed  information  as  to  the 
regulations  of  the  National  Treasury  Department,  the  State  Treasurer's 
office  and  the  Banking  Department  of  California,  together  with  copies 
of  all  forms  incident  to  dealing  with  these  offices;  also  official  statis- 
tics relative  to  the  property  and  earnings  of  railroad  and  other  quasi- 
public  corporations,  the  assessed  valuation  and  other  essential  facts 
regarding  bond  issuing  municipalities. 

T       __    .„.,_  N.  W.  Halsey  &  Company. 

June  L\J,   \y \j. 


Contents 


Page 

Bank  Act  of  California  as  Amended 9 

Public  Deposit  Acts  of  California 103 

Investment  Companies  Act  of  California Ill 

National  Bank  Act  as  Amended 121 

Currency  Act  of  March  14,  1900 207 

Additional  Circulation   (Emergency  Currency  Act) 217 

Postal  Savings  Bank  Act 231 

Postal  Savings  Bonds  (Information  issued  Jan.   1,   1913)...  239 

New  York  Savings  Bank  Law 245 

General  Index 253 


Bank  Act  of  California. 


An  Act  to  Define  and  Regulate 
the  Business  of  Banking 

Article  I. 
GENERAL  PROVISIONS. 
SECTION   1 .     This  act  shall  be  known  as  the  "bank  act,"  and   Title  of  act 
shall  be  applicable  to  all  corporations  specified  in  the  next  section. 

Sec.  2.  The  word  "bank"  as  used  in  this  act  shall  be  Definition  of 
construed  to  mean  any  incorporated  banking  institution  which  shall  Hank' 
have  been  incorporated  to  conduct  the  business  of  receiving  money 
on  deposit,  or  transacting  a  trust  business  as  hereinafter  defined. 
The  soliciting,  receiving  or  accepting  of  money  or  its  equivalent 
on  deposit  as  a  regular  business  shall  be  deemed  to  be  doing  a 
commercial  or  savings  bank  business  whether  such  deposit  is  made 
subject  to  check  or  is  evidenced  by  a  certificate  of  deposit,  a  pass 
book,  a  note,  a  receipt  or  other  writing;  provided,  that  nothing 
herein  shall  apply  to  or  include  money  or  its  equivalent  left  in 
escrow  or  left  with  an  agent,  pending  investment  in  real  estate  or 
securities  for  or  on  account  of  his  principal.  It  shall  be  unlawful 
for  any  corporation,  partnership,  firm  or  individual  to  engage  in  or 
transact  a  banking  business  within  this  state  except  by  means  of  a 
corporation  duly  organized  for  such  purpose.      Banks  are  divided 

into  the  following  classes: 

,  N    c  ,      ,  Kinds  of  banks. 

(a)  .savings  banks; 

(b)  Commercial  banks;    and 

(c)  Trust  companies. 

Sec.  3.     Corporations  may  be  formed  by  any  number  of  natural  Formation  of 
persons,   not  less  in  any  case  than   three,   under  the  laws  of  this  banks. 
state  to  conduct,   as  provided  in  this  act,   and  not  otherwise,   any 
one  or  more  or  all  of  the  businesses  mentioned  in  divisions    (a), 
(b),  and  (c)  of  section  two,  of  this  act. 


10 


N.    W.    HALSEY    &   CO. 


Savings  banks.  Sec.  4.  The  term  "savings  bank,"  when  used  in  this  act,  means 
a  bank  organized  for  the  purpose  of  accumulating  and  loaning  the 
funds  of  its  members,  stockholders,  and  depositors,  and  which  may 
loan  and  invest  the  funds  thereof,  receive  deposits  of  money;  loan, 
invest  and  collect  the  same  with  interest;  and  may  repay  depositors 
with  or  without  interest,  and  having  power  to  invest  said  funds 
in  such  property,  securities  and  obligations  as  may  be  prescribed 
by  this  act ;  and  to  declare  and  pay  dividends  on  its  general  deposits, 
and  a  stipulated  rate  of  interest  on  deposits  made  for  a  stated  period 
or  upon  special  terms. 

Commercial         Sec.  5.      The  term  "commercial  bank,"  when  used  in  this  acti 

banks,     means  any  bank  authorized  by  law  to  receive  deposits  of  money, 

*      deal  in  commercial  paper  or  to  make  loans  thereon,   and  to  lend 

money  on  real  or  personal  property,  and  to  discount  bills,  notes,  or 

other  commercial  paper,  and  to  buy  and  sell  securities,  gold  and 

silver  bullion,  or  foreign  coins  or  bills  of  exchange. 

Trust  Sec.  6.  The  term  "trust  company,"  when  used  in  this  act, 
companies,  means  any  corporation  which  is  incorporated  under  the  laws  of  this 
state  for  the  purpose  of  conducting  the  business  of  acting  as  executor, 
administrator,  guardian  of  estates,  assignee,  receiver,  depositary  or 
trustee  under  appointment  of  any  court  or  by  authority  of  any  law 
of  this  state,  or  as  trustee  for  any  purpose  permitted  by  law. 

Foreign  Sec.  7.  No  foreign  corporation  shall  transact  a  banking  business 
corporations,  in  this  state  without  first  complying  with  all  the  requirements  of  the 
laws  of  this  state  relative  to  banks  as  defined  in  this  act,  and  without 
having  assigned  to  its  business  in  this  state  the  amount  of  paid-up 
capital  and  surplus  required  by  this  act  for  the  transaction  of  such 
business  within  this  state.  No  foreign  banking  corporation  shall 
transact  business  in  this  state  until  such  corporation  has  made  the 
assignment  of  capital  required  by  this  section  and  has  received  a 
certificate  from  the  state  superintendent  of  banks.  Any  foreign 
banking  corporation  transacting  business  in  this  state  shall  become 
subject  to  the  supervision  of  the  state  superintendent  of  banks. 
Every  foreign  banking  corporation,  including  those  which  were  on 
January  second,  nineteen  hundred  thirteen,  transacting  business  in 
this  state,  which  receives  any  deposits  or  transacts  any  other  banking 
business  or  transacts  its  business  in  such  a  manner  as  might  lead  the 


BANK   ACT   OF   CALIFORNIA  11 

public  to  believe  that  its  business  is  that  of  a  bank,  shall  conduct  all 
its  business  in  accordance  with  the  statutes  governing  incorporated 
banking  institutions  organized  under  the  laws  of  this  state.  The 
capital  of  any  such  foreign  banking  corporation  assigned  to  its 
business  in  this  state  and  all  funds  and  deposits  of  money  received 
by  any  such  corporation  in  this  state  or  for  or  in  connection  with  its 
business  in  this  state  and  all  accounts  and  transactions  of  said 
business  transacted  by  any  such  foreign  corporation  in  this  state 
shall  be  kept  separate  and  apart  from  the  general  business,  assets 
and  accounts  of  such  foreign  corporation  in  the  same  manner  as  if 
the  business  of  such  foreign  corporation  conducted  within  this  state 
was  that  of  a  separate  and  independent  corporation  organized  under 
the  laws  of  this  state  for  the  purpose  of  doing  a  banking  business 
and  all  of  the  provisions  of  this  act  affecting  investments,  loans  of 
money,  receiving  deposits  and  conducting  business  in  any  respect 
shall  be  deemed  to  apply  to  such  assigned  capital,  investments,  loans, 
deposits,  assets,  funds  and  business  in  the  same  manner  as  if  such 
assigned  capital,  investments,  loans,  deposits,  assets,  funds  and 
business  were  that  of  such  separate  and  independent  corporation; 
provided,  that  loans  may  be  made  by  any  such  foreign  corporation 
based  on  its  entire  paid-up  capital  and  surplus  in  case  such  foreign 
corporation  shall  have  assigned  to  its  business  in  this  state  a  paid-up 
capital  and  surplus  as  above  provided  equal  to  20  per  centum  of 
the  deposit  liability  of  such  branch  agency  or  office  to  residents  of 
this  state.  Such  funds  and  investments  or  loans  thereof  shall  be 
appropriated  solely  to  the  security  and  payment  of  such  deposits, 
and  shall  not  be  mingled  with  the  investments  of  the  capital  stock 
or  other  money  or  property  belonging  to  such  corporation  or  be 
liable  for  the  debts  or  obligations  thereof.  All  income  received  from 
the  investment  of  said  funds  over  and  above  such  funds  as  may  be 
paid  to  depositors  as  interest  or  shall  be  carried  to  the  surplus  fund, 
as  provided  in  section  twenty-one  of  this  act,  shall  accrue  as  profits 
to  the  corporation  and  may  be  transferred  to  its  general  funds.  No 
such  foreign  corporation  shall  transact  any  banking  business  in  this 
state  until  it  has  executed  and  filed  with  the  superintendent  of  banks 
a  written  instrument  appointing  such  superintendent  or  his  successor 
in  office,  its  true  and  lawful  attorney,  upon  whom  all  process  issued 
by  authority  of  or  under  any  law  of  this  state  may  be  served,  with 


12  N.    W.    HALSEY    &   CO. 

the  same  effect  as  if  such  corporation  was  formed  under  the  laws 
of  this  state  and  had  been  lawfully  served  with  process  therein. 
Such  service  upon  such  attorney  shall  be  deemed  personal  service 
on  such  corporation.  The  superintendent  of  banks  shall  forthwith 
forward  by  mail,  postage  prepaid,  a  copy  of  every  process  served 
upon  him  under  the  provisions  of  this  section,  addressed  to  the 
manager  or  agent  of  such  corporation,  at  its  principal  place  of 
business  in  this  state.  For  each  copy  of  process,  the  superintendent 
of  banks  shall  collect  the  sum  of  two  dollars,  which  shall  be  paid 
by  the  plaintiff  or  moving  party  at  the  time  of  the  service,  to  be 
recovered  by  him  as  a  part  of  his  taxable  costs  if  he  succeed  in  the 
suit  or  proceeding.  No  foreign  corporation  shall  have  or  exercise 
in  this  state  the  power  to  receive  deposits  of  trust  moneys,  securities 
or  other  personal  property  from  any  person  or  corporation  or  any 
of  the  powers  specified  in  section  six  of  this  act,  nor  have  or  maintain 
an  office  in  this  state  for  the  transaction  of,  or  transact,  directly  or 
indirectly,  any  such  or  similar  business,  except  that  a  trust  company 
incorporated  in  another  state  may  be  appointed  and  may  accept 
appointment  and  may  act  in  this  state  as  executor  of  or  trustee 
under  the  last  will  and  testament  of  any  deceased  person,  upon 
giving  the  bond  required  in  such  cases  of  individuals  unless  waived 
by  the  last  will  and  testament  making  such  appointment  and  by 
taking  and  subscribing  an  oath  for  faithful  performance  of  such 
trust  by  the  president,  vice-president,  secretary,  manager  or  trust 
officer  of  said  corporation;  provided,  that  similar  corporations 
organized  under  the  laws  of  this  state  are  permitted  by  law  to  act 
as  such  executor  or  trustee  in  the  state  where  such  foreign  corporation 
was  organized;  and  provided,  further,  that  such  superintendent  of 
banks,  for  the  time  being,  shall  be  the  attorney  of  such  foreign 
corporation  qualifying  or  acting  in  this  state  as  such  executor  or 
trustee,  upon  whom  process  against  such  foreign  corporation  may  be 
served  in  any  action  or  legal  proceeding  against  such  executor  or 
trustee,  affecting  or  relating  to  the  estate  or  property  represented  or 
held  by  such  executor  or  trustee,  or  any  act  or  default  of  such 
foreign  corporation  in  reference  to  such  estate  or  property,  and  it 
shall  be  the  duty  of  any  such  foreign  corporation  so  qualifying  or 
acting  to  file  in  the  office  of  said  superintendent  of  banks  a  copy 
of   its   articles  of   incorporation,   or  of  the  statute   chartering   such 


BANK   ACT   OF   CALIFORNIA  13 

corporation,  certified  by  its  secretary  under  its  corporate  seal, 
together  with  the  post  office  address  of  its  home  office,  and  a  duly 
executed  appointment  of  said  superintendent  of  banks  as  its  attorney 
to  accept  service  of  process  as  above  provided,  and  said  superin- 
tendent of  banks,  when  any  such  process  is  served  upon  him,  shall 
at  once  mail  the  papers  so  served  to  the  home  office  of  such 
corporation;  and  provided,  further,  that  no  foreign  corporation 
having  authority  to  act  as  executor  of  or  trustee  under  the  last  will 
and  testament  of  any  deceased  person  shall  establish  or  maintain, 
directly  or  indirectly,  any  branch  office  or  agency  in  this  state,  or 
shall  in  any  way  solicit,  directly  or  indirectly,  any  business  as 
executor  or  trustee  therein,  and  that  for  any  violation  of  this  proviso, 
the  court  having  jurisdiction  of  such  executor  or  trustee  in  said 
proceeding  may  in  its  discretion,  revoke  the  right  of  such  foreign 
corporation  thereafter  to  act  as  executor  or  trustee  therein;  provided, 
that  nothing  in  this  act  shall  limit  or  affect  the  right  of  any  foreign 
corporation  doing  a  banking  business  in  this  state,  to  lend  within 
this  state,  moneys  of  such  corporation  which  do  not  form  a  part 
of  the  moneys,  deposits  or  assets  of  such  corporation  assigned  or 
belonging  to  its  business  in  this  state. 

Sec.  8.     Every  corporation,  at  the  time  it  applies  for  a  certificate  Filing  articles  of 
of  authority  to  do  a  banking  business,  must  file  with  the  superin-  incorporation 
tendent  of  banks  a  certified  copy  of  its  articles  of  incorporation,  or  and  amendments. 
of  the  statute  chartering  such  corporation,  a  certified  copy  of  its  by- 
laws, and  also  a  certified  copy  of  all  instruments  amending  or  altering 
such  articles  of  incorporation  or  charter  or  by-laws.     Thereafter  a 
certified  copy  of  each  amendment  or  certificate  shall  likewise  be  so 
filed  before  such  instrument  takes  effect.     There  must  also  be  filed 
in  the  office  of   the   superintendent  of  banks  before  he  shall   issue 
his  certificate  a  certified  copy  of   the  affidavit  required  by  section 
290a    of    the    Civil    Code.      Each    certification    required    by    the 
provisions  of  this  section  other  than  that  of  by-laws  must  be  by  the 
secretary  of  state. 

Sec.    9.      No   bank   in   this   state,    or   any   officer   or   director  Branch  banks. 
thereof,  shall  hereafter  open  or  keep  an  office  other  than  its  principal 
place  of  business,  without  first  having  obtained  the  written  approval 
of  the  superintendent  of  banks  to  the  opening  of  such  branch  office, 
which  written  approval  may  be  given  or  withheld  in  his  discretion, 


M N.    W.    HALSEY    &   CO. 

and  shall  not  be  given  by  him  until  he  has  ascertained  to  his 
satisfaction  that  the  public  convenience  and  advantage  will  be 
promoted  by  the  opening  of  such  branch  office;  provided,  that  no 
bank  or  any  officer  or  director  thereof,  shall  open  or  maintain  any 
such  branch  office  unless  the  capital  of  such  bank,  actually  paid  in, 
in  cash,  shall  exceed  the  amount  required  by  this  act  by  the  sum 
of  twenty-five  thousand  dollars  for  each  branch  office  opened  and 
maintained.  Every  bank,  before  it  opens  a  branch  office,  shall 
obtain  the  certificate  of  authority  of  the  superintendent  of  banks 
for  the  opening  of  each  of  said  branch  offices.  The  applicant  shall 
pay  for  such  certificate  a  fee  of  fifty  dollars;  provided,  however, 
that,  in  order  to  encourage  saving  among  the  children  of  the  schools 
of  this  state,  a  bank  may,  with  the  written  consent  of  and  under 
regulations  approved  by  the  superintendent  of  banks  and,  in  the 
case  of  public  schools,  by  the  board  of  education  or  board  of  school 
trustees  of  the  city  or  district  in  which  the  school  is  situated,  arrange 
for  the  collection  of  savings  from  the  school  children  by  the  principal 
or  teachers  of  such  schools  or  by  collectors.  The  principal,  teacher 
or  person  authorized  by  the  bank  to  make  collections  from  the  school 
children  shall  be  deemed  to  be  the  agent  of  the  bank  and  the  bank 
shall  be  liable  to  the  pupil  for  all  deposits  made  with  such  principal, 
teacher  or  other  person,  the  same  as  if  the  deposits  were  made  by 
the  pupil  directly  with  the  bank.  Every  bank  and  every  such 
officer  or  director  violating  the  provisions  of  this  section  shall  forfeit 
to  the  people  of  the  state  the  sum  of  one  hundred  dollars  for  every 
day  during  which  any  branch  office  hereafter  opened  shall  be 
maintained  without  such  written  approval. 

Eligibility  of  Sec.  1 0.  No  person  shall  be  eligible  for  election  as  director 
directors.  0f  a  bank  having  a  capital  stock  unless  he  is  a  stockholder  of  the 
bank,  owning,  in  his  own  right,  shares  thereof  of  the  par  value  of 
at  least  five  hundred  dollars;  and  every  person  elected  to  be 
director  who,  after  such  election,  shall  cease  to  be  the  owner  in  his 
own  right  of  the  amount  of  such  stock  aforesaid,  or  shall  hypothecate 
or  in  any  way  pledge  such  stock  as  security  for  any  loan  or  debt 
shall  immediately  notify  the  superintendent  of  banks  in  writing  of 
such  sale  or  hypothecation  and  such  director  may  be  removed  from 
the  office  of  director  by  the  superintendent  of  banks.  If  a  bank 
be  organized  without  capital  stock,   no  person  shall  be  eligible  as 


BANK   ACT   OF   CALIFORNIA  15 

a  director  thereof  unless  he  is  both  a  member  and  a  depositor  of 
such  bank. 

Sec.  1 1 .  The  board  of  directors  of  a  bank  must  hold  a  Directors* 
meeting  at  least  once  a  month.  Each  director,  when  appointed  meeting. 
or  elected,  shall  take  an  oath  that  he  will,  so  far  as  the  duty 
devolves  on  him,  diligently  and  honestly  administer  the  affairs  of 
such  bank,  and  will  not  knowingly  violate  or  wilfully  permit  to 
be  violated  any  of  the  provisions  of  law  applicable  to  such  bank, 
and  that  he  is  the  owner  in  good  faith  and  in  his  own  right  of 
shares  of  stock  of  the  par  value  required  by  section  10  of  this 
act,  subscribed  by  him  or  standing  in  his  name  on  the  books  of  the 
bank,  and  that  the  same  to  an  amount  equal  to  the  par  value  of  at 
least  five  hundred  dollars,  are  not  hypothecated  or  in  any  way 
pledged  as  security  for  any  loan  or  debt.  Such  oath  shall  be 
subscribed  by  the  director  making  it,  certified  by  the  officer  before 
whom  it  is  taken,  and  immediately  transmitted  to  the  superintendent 
of  banks  and  filed  and  preserved  in  his  office. 

Sec.   1 2.      No  person,  firm,  company,  copartnership  or  corpora-  Use  of  words 
tion,   either  domestic  or   foreign,   not  subject  to   the  supervision  of  indicating 
the  superintendent  of  banks,  and  not  required,  by  the  provisions  of  performance  of 
this  act,  to  report  to  him,  and  which  has  not  received  a  certificate  banking  business. 
to  do  a  banking  business  from  the  superintendent  of  banks,   shall 
advertise  that  he  or  it  is  receiving  or  accepting  money  or  savings, 
and  issuing  notes  or  certificates  of  deposit  therefor,  or  shall  make 
use  of  any  office  sign,  at  the  place  where  such  business  is  transacted, 
having    thereon   any   artificial   or   corporate   name,    or   other   words 
indicating  that  such  place  or  office  is  the  place  or  office  of  a  bank 
or  trust  company,  or  that  deposits  are  received  there  or  payments  , 

made  on  check,  or  any  other  form  of  banking  business  transacted, 
nor  shall  any  such  person  or  persons,  firm,  company,  copartnership 
or  corporation,  domestic  or  foreign,  make  use  of  or  circulate  any 
letterheads,  billheads,  blank  notes,  blank  receipts,  certificates  or 
circulars,  or  any  written  or  printed,  or  partly  written  and  partly 
printed,  paper,  whatever,  having  thereon  any  artificial  or  corporate 
name  or  other  word  or  words  indicating  that  such  business  is  the 
business  of  a  bank,  savings  bank  or  trust  company;  nor  shall  any 
such  person,  firm,  company,  copartnership  or  corporation,  or  any 
agent  of  a  foreign  corporation  not  having  an  established  place  of 


16 N.    W.    HALSEY    &   CO. 

business  in  this  state,  solicit  or  receive  deposits  or  transact  business 
in  the  way  or  manner  of  a  bank,  savings  bank  or  trust  company,  or 
in  such  a  way  or  manner  as  to  lead  the  public  to  believe  that  its 
business  is  that  of  a  bank,  savings  bank  or  trust  company.  Nor 
shall  any  person,  firm,  company,  copartnership  or  corporation, 
domestic  or  foreign,  not  subject  to  the  supervision  of  the  superin- 
tendent of  banks,  and  not  required  by  the  provisions  of  this  act 
to  report  to  him,  and  which  has  not  received  from  the  superintendent 
of  banks  a  certificate  to  do  a  banking  business,  hereafter  transact 
business  under  any  name  or  title  which  contains  the  word  "bank," 
or  "banker,"  or  "banking,"  or  "savings  bank,"  or  "savings"  or 
"trust"  or  "trustee"  or  "trust  company";  provided,  that  this  section 
shall  not  apply  to  the  corporate  name  of  any  building  and  loan- 
association  now  or  heretofore  doing  business  in  this  state;  and 
provided,  further,  that  any  such  association  having  in  its  corporate 
name  words  not  clearly  indicating  the  nature  of  its  business  shall, 
on  all  signs,  letter  heads  and  advertising  matter,  state  "This  is  a 
building  and  loan  association"  or  words  to  that  effect;  and 
provided,  further,  that  any  building  and  loan  association  may 
borrow  money,  issue  investment  certificates  or  evidences  of  indebted- 
ness, stating  the  rate  of  interest  and  terms  and  conditions  of 
repayment,  and  do  such  other  business  as  may  be  authorized  by 
the  laws  of  the  state  relating  to  building  and  loan  associations; 
and  provided,  further,  that  no  such  association  shall  advertise  or 
hold  itself  out  to  the  public  as  a  savings  bank.  Any  person,  firm, 
company,  copartnership  or  corporation,  domestic  or  foreign,  violating 
any  provision  of  this  section  shall  forfeit  to  the  state  one  hundred 
dollars  a  day  for  every  day  or  part  thereof  during  which  such 
violation  continues.  Upon  action  brought  by  the  superintendent 
of  banks  the  court  may  issue  an  injunction  restraining  any  such 
person,  firm,  company,  copartnership  or  corporation  from  further 
using  such  words  in  violation  of  the  provisions  of  this  section  or 
from  further  transacting  business  in  such  a  way  or  manner  as  to 
lead  the  public  to  believe  that  its  business  is  that  of  a  bank,  savings 
bank  or  trust  company  during  the  pendency  of  such  action  and  for 
all  time  and  may  make  such  other  order  or  decree  as  equity  and 
justice  may  require. 


BANK   ACT   OF   CALIFORNIA 17 

Sec.  12a.  Every  person,  firm,  company,  copartnership  or  Banking 
corporation,  domestic  or  foreign,  advertising  that  he  or  it  is  receiving  business  defined. 
or  accepting  money  or  savings,  and  issuing  notes  or  certificates  of 
deposit  therefor,  or  advertising  that  he  or  it  is  transacting  the 
business  of  a  bank,  savings  bank  or  trust  company,  or  making  use 
of  any  office  sign  at  the  place  where  such  business  is  transacted, 
having  thereon  any  artificial  or  corporate  name,  or  other  words 
indicating  that  such  place  or  office  is  the  place  or  office  of  a  bank 
or  trust  company,  or  that  deposits  are  received  there  or  payments 
made  on  check,  or  that  interest  is  paid  on  deposits,  or  that  certificates 
of  deposit,  either  with  or  without  interest  are  being  issued,  or  that 
any  other  form  of  banking  business  is  transacted,  and  every  person, 
firm,  company,  copartnership  or  corporation,  domestic  or  foreign, 
making  use  of  or  circulating  any  letterheads,  billheads,  blank  notes, 
blank  receipts,  certificates  or  circulars,  or  any  written  or  printed, 
or  partly  written  and  partly  printed,  paper,  whatever,  having 
thereon  any  artificial  or  corporate  name,  or  advertising  that  such 
business  is  the  business  of  a  bank,  savings  bank  or  trust  company, 
must  have  the  proper  capital  stock  paid  in  and  set  aside  for  the 
purpose  of  transacting  such  business,  and  must  have  received  from 
the  superintendent  of  banks,  as  provided  for  in  this  act,  a  certificate 
to  do  a  banking  business.  Any  person,  firm,  company,  copartner- 
ship or  corporation,  domestic  or  foreign,  violating  any  provision  of 
this  section  shall  forfeit  to  the  state  one  hundred  dollars  a  day 
for  every  day  or  part  thereof  during  which  such  violation  continues. 
Upon  action  brought  by  the  superintendent  of  banks  the  court  may 
issue  an  injunction  restraining  any  such  person,  firm,  company, 
copartnership  or  corporation  from  further  violating  any  provision 
of  this  section,  and  may  make  such  further  order  or  decree  as 
equity  and  justice  may  require.  Every  person,  firm,  company, 
copartnership  or  corporation  doing  any  of  the  things  or  transacting 
any  of  the  business  defined  in  this  section,  must  transact  such 
business  according  to  the  provisions  of  the  bank  act,  and  the 
superintendent  of  banks  or  his  deputy  or  examiners  shall  have 
authority  to  examine  the  accounts,  books  and  papers  of  every  such 
person,  firm,  company,  copartnership  or  corporation,  domestic  or 
foreign,  in  order  to  ascertain  whether  such  person,  firm,  company, 
copartnership  or  corporation  has  violated  or  is  violating  any 
provisions  of  this  section;    provided,  that  this  section  shall  not  apply 


18  N.    W.    HALSEY   &   CO. 


to  the  corporate  name  of  any  building  and  loan  association  now  or 
heretofore  doing  business  in  this  state;  and  provided,  further,  that 
any  such  association  having  in  its  corporate  name  words  not  clearly 
indicating  the  nature  of  its  business  shall,  on  all  signs,  letterheads 
and  advertising  matter,  state:  "This  is  a  building  and  loan 
association"  or  words  to  that  effect;  and  provided,  further,  that 
any  building  and  loan  association  may  borrow  money,  issue  invest- 
ment certificates  or  evidences  of  indebtedness,  stating  the  rate  of 
interest  and  terms  and  conditions  of  repayment,  and  do  such  other 
business  as  may  be  authorized  by  the  laws  of  the  state  relating  to 
building  and  loan  associations;  and  provided,  further,  that  no  such 
association  shall  advertise  or  hold  itself  out  to  the  public  as  a  savings 
bank. 

Foreign  Sec.  12k.  Nothing  in  this  act  shall  be  construed  or  held  to 
corporations,  apply  to  any  corporation  organized  under  the  laws  of  any  other 
state  which  is  authorized  by  its  charter  or  articles  of  incorporation 
to  transact  the  business  of  life  insurance  and  also  to  be  known  as 
and  to  transact  business  as  a  trust  company  and  which  shall  have 
complied  with  the  laws  of  this  state  affecting  the  transaction  in  this 
state  of  the  business  of  life  insurance  by  a  foreign  corporation  and 
which  shall  have  heretofore  engaged  in  such  business  of  life  insurance 
in  this  state,  in  such  manner  as  to  forbid  or  prevent  its  making  use 
of  its  corporate  title  in  its  life  insurance  business  in  this  state  in 
any  such  way  and  to  any  such  extent  as  it  might  have  made  use  of 
the  same  if  this  act  had  not  been  passed. 

Foreign  Sec.  12c.  Any  corporation  organized  under  the  laws  of  any 
corporations  country  or  state  other  than  this  state  which  has  complied  with  all 
may  lend  money,  of  the  laws  of  this  state  pertaining  to  foreign  corporations  and  is 
not  engaged  in  the  business  of  banking  or  receiving  money  on  deposit 
in  this  state  may  lend  money  in  this  state  and,  for  that  purpose, 
may  maintain  offices  in  this  state,  and  sue  and  be  sued  in  this  state 
under  its  proper  corporate  name,  notwithstanding  any  prohibitions 
contained  in  this  act  as  to  the  use  of  any  words  in  the  name,  signs 
or  advertising  matter  of  corporations  not  under  the  supervision  of  the 
superintendent  of  banks. 

Section  thirteen  repealed  1913. 


BANK  ACT   OF   CALIFORNIA 19 

SEC.    14.     No  bank,  or  officer  thereof,  shall  advertise  in  any  Advertising 
manner,    or   publish    any    statement    of    the    capital    authorized    or  statement  of 
subscribed,    unless    it    or   he   advertise    and    publish    in    connection  capital. 
therewith,  the  amount  of  capital  actually  paid  up.     No  bank  shall 
publish  a  statement  of  its  resources  or  liabilities  in  connection  with 
those   of   any   other   bank,    unless   such   statement   shall    show    the 
resources  and  liabilities  of  each  bank  separately;    nor  shall  surplus 
and  undivided  profits  be  advertised  as  an  aggregate. 

Sec.     15.     All    amounts    of    money    heretofore    or    hereafter  Report  of 
deposited  with  any  bank  to  the  credit  of  depositors  who  have  not  deceased  of 
made  a  deposit  on  said  account  or  withdrawn  any  part  thereof  or  unlocated 
the  interest  and  which  shall  have  remained  unclaimed  for  more  than  depositors. 
twenty  years  after  the  date  of  such  deposit,  or  withdrawal  of  any 
part  of  principal  or  interest,  and  for  which  no  claimant  is  known 
or   the   depositor   cannot   be   found,    shall,   with    the   increase   and 
proceeds  thereof,  be  deposited  with  the  state  treasurer  in  the  same 
manner   and   subject   to   the  same   distribution   as   provided   for   in 
section  one  thousand  two  hundred  thirty-four  of  the  Code  of  Civil 
Procedure.     The  president  or  managing  officer  of  every  bank  must, 
within  fifteen  days  after  the  first  day  of  January  of  every  year, 
return  to  the  superintendent  of  banks  a  sworn  statement  showing  the 
names  of   depositors  known  to  be  dead,   or  who  have  not  made 
further  deposits,   or  withdrawn   any  moneys   during  the   preceding 
twenty  years   and   at   the  same  time  it  shall   be  the  duty  of  the 
president  or  managing  officer  of  every  bank  to  furnish  to  the  state 
controller  a  list  of  the  names  of  all  depositors  to  whom  said  moneys 
belong  or  to  whom  said  bank  owes  the  same.     Such  statement  shall 
show  in  detail  the  following  matters,  viz: 

First — The  name  and  last  known  place  of  residence  or  postoffice 
address  of  the  person  making  such  deposit; 

Second — The  amount  and  date  of  such  deposit  and  whether  the 
same  are  in  moneys  or  securities,  and  if  the  latter,  the  nature  of  the 
same; 

Third — The  interest  due  on  such  deposit,  if  any,  and  the  amount 
thereof ; 

Fourth —  The  sum  total  of  such  deposit,  together  with  the  interest 
added  thereto  due  from  such  bank  on  account  of  such  deposit  or 


20 N.    W.    HALSEY    &   CO. 

deposits  and  interest  thereon  to  such  depositor,  but  nothing  contained 
herein  shall  require  any  corporation  or  person  renting  lock  boxes 
or  safes  in  vaults  for  storage  purposes  to  open  or  report  concerning 
property  stored  therein.  Such  report  itemized  as  aforesaid  shall  be 
signed  by  the  person  making  the  same  and  shall  be  sworn  to  before 
a  person  competent  to  administer  oaths  as  a  full,  complete  and 
truthful  statement  of  each  of  the  items  therein  contained.  The 
president  or  managing  officer  of  every  bank  must,  within  fifteen  days 
after  the  first  day  of  January  of  every  odd  numbered  year,  return 
to  the  superintendent  of  banks  a  sworn  statement  showing  the  names 
of  depositors  known  to  be  dead,  or  who  have  not  made  further 
deposits,  or  withdrawn  any  moneys  during  the  preceding  ten  years. 
Such  statements  shall  show  the  amount  of  the  account,  the  depos- 
itor's last  known  place  of  residence  or  postoffice  address,  and  the 
fact  of  death,  if  known  to  such  president  or  managing  officer. 
Such  president  or  managing  officer  must  give  notice  of  these 
deposits  in  one  or  more  newspapers  published  in  or  nearest 
to  the  town  or  city  where  such  bank  has  its  principal  place 
of  business,  at  least  once  a  week  for  four  consecutive  weeks, 
the  cost  of  such  publication  to  be  paid  pro  rata  out  of  such 
unclaimed  deposits.  This  section  does  not  apply  to  any  deposit 
made  by  or  in  the  name  of  a  person  known  to  the  president  or 
managing  officer  to  be  living,  or  which,  with  the  accumulation 
thereon,  is  less  than  fifty  dollars.  The  superintendent  of  banks 
must  incorporate  in  his  subsequent  report  such  returns  made  to  him 
as  provided  in  this  section.  If  any  president  or  managing  officer  of 
any  bank  neglects  or  refuses  to  make  the  sworn  statement  required 
by  this  section,  such  bank  shall  forfeit  to  the  State  of  California 
the  sum  of  one  hundred  dollars  a  day  for  each  day  such  default 
shall  continue.  Any  president  or  managing  officer  of  any  bank 
who  violates  any  of  the  provisions  of  this  section  shall  forfeit  to  the 
State  of  California  the  sum  of  one  hundred  dollars  a  day  for  each 
and  every  day  such  violation  shall  continue.  For  the  purposes  of 
this  section  all  deposits  received  by  any  bank  under  the  provisions 
of  section  thirty-one  or  section  thirty-one  a  of  this  act  shall  be  deemed 
to  have  been  deposited  with  such  bank  at  the  time  the  deposit  was 
made  with  the  bank  from  which  the  deposit  was  transferred ;  provided, 
that  any  bank  which  shall  make  any  deposit  with  the  state  treasurer 


BANK   ACT   OF   CALIFORNIA  21 


in  conformity  with  the  provisions  of  this  section  shall  not  thereafter 
be  liable  to  any  person  for  the  same  and  any  action  which  may  be 
brought  by  any  person  against  any  bank  for  moneys  so  deposited 
with  the  state  treasurer  shall  be  defended  by  the  attorney  general 
without  cost  to  such  bank. 

Sec.   1 6.     When  any  deposit  with  a  bank  shall  be  made  by  or  Deposits  in 
in  the  name  of  any  married  woman  or  minor,   the  same  shall  be  name  of  a 
held  for  the  exclusive  right  and  benefit  of  such  depositor,  and  free  married  woman 
from  the  control  or  lien  of  all  other  persons,  except  creditors,  and  or  minor. 
shall  be  paid,  together  with  the  dividends,  if  any,  and  interest,  if 
any,  thereon  to  the  person  in  whose  name  deposits  shall  have  been 
made,  and  the  receipt  or  acquittance  of  such  minor  shall  be  a  valid 
and  sufficient  release  and  discharge  for  such  deposit,  or  any  part 
thereof,  to  the  bank.     When  any  deposit  with  a  bank  shall  be  made  /)eposi7s 
by  any  person  in  trust  for  another,  and  no  other  or  further  notice  of  ,n  frusI. 
the  existence  and  terms  of  a  legal  and  valid  trust  shall  have  been 
given  in  writing  to  such  bank,   in  the  event  of   the  death   of  the 
trustee,  the  same  or  any  part  thereof,  together  with  the  dividends  or 
interest,  if  any,  thereon,  may  be  paid  to  the  person  for  whom  the 
deposit  was  made.     When  a  deposit  with  a  bank  shall  be  made  by 
any  person  in  the  names  of  such  depositor  and  another  person  or  Joint  accounts. 
persons,  and  in  form  to  be  paid  to  either  or  the  survivor  or  survivors 
of  them,   such   deposit  thereupon,   and  any  additions  thereto  made 
by  either  of  such  persons  upon  the  making  thereof,  shall  become  the 
property  of  such  person   as  joint   tenants,    and  the  same,   together 
with  all  interest  thereon,  shall  be  held  for  the  exclusive  use  of  the 
persons  so  named,  and  may  be  paid  to  either  during  the  lifetime  of 
all  or  any  or  to  the  survivor  or  survivors  after  the  death  of  one  or 
more  of  them,  and  such  payments  and  the  receipt  or  acquittance  of 
the  one  to  whom  such  payment  is  made  shall  be  valid  and  sufficient 
release    and    discharge    to    said    bank    for    all    payments    made    on 
account  of  such  deposit.      The  surviving  husband  or  wife  or  the  Payment  of 
guardian  of  the  estate  of  any  insane  or  incompetent  husband  or  wife  of  deposits  of 
any  deceased  person,  or,  if  no  husband  or  wife  is  living,  then  the  deceased 
children  or  the  guardian  of  the  estates  of  any  minor  or  insane  or  incom-  persons  to 
petent  children  of  said  decedent,  or,  if  no  children  are  living,  then  the  survivors, 
father  or  mother  or  guardian  of  the  estate  of  any  insane  or  incom- 
petent father  or  mother  of  such  decedent,  and  if  neither  the  father 


22  N.    W.    HALSEY   &   CO. 

or  mother  is  living,  then  the  brothers  and  sisters  or  the  guardian  of 
the  estates  of  any  minor  or  insane  or  incompetent  brothers  and  sisters 
of  such  decedent,  may,  without  procuring  letters  of  administration, 
collect  of  any  bank  any  sum  which  said  deceased  may  have  left  on 
deposit  in  such  bank  at  the  time  of  his  or  her  death;  provided,  such 
deposit  shall  not  exceed  the  sum  of  five  hundred  dollars.  Any 
bank,  upon  receiving  an  affidavit  stating  that  said  depositor  is  dead, 
and  that  affiant  is  the  surviving  husband  or  wife  or  the  guardian  of 
the  estate  of  an  insane  or  incompetent  surviving  husband  or  wife,  as 
the  case  may  be,  of  said  decedent,  or  stating  that  decedent  left  no 
husband  or  wife,  and  that  affiant  is,  or  affiants  are,  the  children,  or 
the  guardians  of  the  estates  of  the  minor,  insane  or  incompetent 
children,  as  the  case  may  be,  of  said  decedent,  or  stating  that 
decedent  left  neither  husband,  wife,  nor  children  and  that  affiant  is 
the  father  or  mother,  or  the  guardian  of  the  estate  of  the  insane  or 
incompetent  father  or  mother,  as  the  case  may  be,  of  said  decedent, 
or  stating  that  the  decedent  left  neither  husband,  wife,  children, 
father  nor  mother,  and  that  affiants  are  the  brothers  and  sisters  or 
the  guardians  of  the  estates  of  the  minor,  insane  or  incompetent 
brothers  and  sisters,  as  the  case  may  be,  of  said  decedent,  and  that 
the  whole  amount  that  decedent  left  on  deposit  in  any  and  all  banks 
of  deposit  of  this  state,  does  not  exceed  the  sum  of  five  hundred 
dollars,  may  pay  to  said  affiant  or  affiants,  any  deposit  of  said 
decedent,  if  the  same  does  not  exceed  the  sum  of  five  hundred 
dollars,  and  the  receipt  of  such  affiant  is  sufficient  acquittance 
therefor;  provided,  however,  that  whenever  the  affidavit  herein  men- 
tioned is  made  by  any  guardian  it  shall  be  accompanied  by  a 
certified  copy  of  the  letters  of  guardianship  issued  to  such  guardian 
attached  to  a  certificate  of  the  clerk  of  the  court  having  appointed 
such  guardian  to  the  effect  that  the  said  letters  of  guardianship  have 
not  been  revoked. 

r  ,         .•      .         Sec.    1 7.     Every  bank  now  in  existence  or  hereafter  organized 

l    l  >.j       *i    shall  keep  in  its  offices,  in  a  place  accessible  to  the  stockholders, 
be  l(ept  on  file  c 

,  .  II  / j  depositors,  and  creditors  thereof,  and  for  their  use,  a  book  containing 
a  list  of  stockholders  in  such  corporation,  and  the  number  of  shares 
of  stock  held  by  each;  and  every  such  bank  shall  keep  posted  in  its 


BANK   ACT   OF   CALIFORNIA 23 

office,  in  a  conspicuous  place,  accessible  to  the  public  generally,  a  Information  for 
notice  signed  by  the  president  or  secretary,  showing:  ine  public. 

1.  The  names  of  the  directors  of  such  bank. 

2.  The  number  and  the  par  value  of  the  shares  of  stock  held  by 
each  director. 

The  entries  on  such  book  and  such  notice  shall  be  made  and 
posted  within  twenty-four  hours  after  any  transfer  of  stock,  and 
shall  be  prima  facie  evidence  against  each  director  and  stockholder 
of  the  number  of  shares  of  stock  held  by  each. 

Section  eighteen  repealed  1913. 

Sec.    19.     The  aggregate  of  paid-up  capital,  together  with  the  Relation  of 
surplus,  of  every  commercial  bank,  must  equal  ten  per  centum  of  Pald~uP  capital 
its  deposit  liabilities;  such  deposit  liabilities  shall  not  be  increased       deposit 
when  such  proportion  of  paid-up  capital  and  surplus  is  wanting,  and  Ltaomues' 
in  no  event  shall  said  paid-up  capital  be  less  than   the  minimum 
paid-up  capital  provided  by  this  act;  provided,  however,  that  the 
aggregate   of   paid-up   capital    and   surplus   of   every   savings   bank 
having  a  capital  stock,  and  the  reserve  fund  of  every  savings  bank 
without  a  capital  stock,  must  equal  the  following  percentages  of  its 
deposit  liabilities: 

(a)  Ten  per  centum  of  any  amount  up  to  and  including  two 
million  dollars. 

(b)  Seven  and  one-half  per  centum  of  any  amount  in  excess  of 
two  million  dollars  up  to  and  including  five  million  dollars. 

(c)  Five  per  centum  of  any  amount  in  excess  of  five  million 
dollars  up  to  and  including  fifteen  million  dollars. 

(d)  Two  and  one-half  per  centum  of  any  amount  in  excess  of 
fifteen  million  dollars  up  to  and  including  forty  million  dollars. 

(e)  One  per  centum  of  any  amount  in  excess  of  forty  million 
dollars. 

The  deposits  shall  not  be  increased  if  such  proportion  of  paid-up 
capital  and  surplus  or  reserve  fund  to  deposit  liabilities  is  not  main- 
tained. 


24  N.   W.    HALSEY   &   CO. 

Lawful  Sec.  20.  Every  commercial  bank  receiving  deposits  as  a 
money  depositary  bank  of  other  banks  shall  have  at  all  times  as  its  lawful 

reserve,  money  reserve  an  amount  equal  to  twenty  per  centum  of  the  aggre- 
gate amount  of  its  deposits.  Two-fifths  of  such  reserve  shall  be  in 
its  own  keeping  in  lawful  money  of  the  United  States,  or  gold 
certificates  or  silver  certificates  of  the  United  States.  The  remaining 
three-fifths  thereof  may  consist  of  moneys  on  deposit  subject  to  call 
with  any  bank  or  banks  in  this  state  other  than  a  savings  bank;  or 
one-half  of  such  three-fifths  or  any  less  portion  thereof  may  consist 
of  moneys  on  deposit  subject  to  call  with  any  bank  or  banks  in  the 
cities  of  New  York,  Chicago  or  St.  Louis,  other  than  a  savings 
bank,  and  the  balance  of  such  three-fifths,  of  moneys  on  deposit 
subject  to  call  with  any  bank  or  banks  in  this  state  other  than  a 
savings  bank.  Every  commercial  bank  not  receiving  deposits  as  a 
depositary  bank  of  other  banks  shall  have  at  all  times  as  its  lawful 
money  reserve,  an  amount  equal  to  fifteen  per  centum  of  the  aggre- 
gate amount  of  its  deposits.  Two-fifths  of  such  reserve  shall  be  in 
its  own  keeping  in  lawful  money  of  the  United  States,  or  gold 
certificates  or  silver  certificates  of  the  United  States.  The  remaining 
three-fifths  thereof  may  consist  of  moneys  on  deposit  subject  to  call 
with  any  bank  or  banks  in  this  state  other  than  a  savings  bank;  or, 
one-half  of  such  three-fifths  or  any  less  portion  thereof  may  consist 
of  moneys  on  deposit  subject  to  call  with  any  bank  or  banks  in  the 
cities  of  New  York,  Chicago  or  St.  Louis,  other  than  a  savings 
bank,  and  the  balance  of  such  three-fifths,  of  moneys  on  deposit 
subject  to  call  with  any  bank  or  banks  in  this  state  other  than  a 
savings  bank.  If  the  lawful  money  reserve  of  any  bank  shall  be  less 
than  the  amount  required  by  this  section,  such  bank  shall  not  increase 
Insufficient  its  liabilities  by  making  any  new  loans  or  discounts,  otherwise  than 
money  by  discounting  bills  of  exchange  on  sight,  or  by  paying  any  dividends 

reserve,  from  profits  until  the  full  amount  of  its  lawful  money  reserve  has 
been  restored.  The  superintendent  of  banks  may  notify  any  bank 
whose  lawful  money  reserve  shall  be  below  the  amount  herein 
required,  to  restore  such  reserve;  and,  if  it  shall  fail  for  thirty  days 
thereafter  to  restore  such  lawful  money  reserve,  such  bank  shall  be 
deemed  insolvent  and  may  be  proceeded  against  under  the  provisions 


BANK   ACT   OF   CALIFORNIA  25 

of  this  act;  provided,  that  all  deposits  of  money  herein  permitted  or 
required  shall  comply  with  the  provisions  of  section  forty-three  of 
this  act. 

Sec.  2 1 .  The  directors  of  any  bank  having  a  capital  stock  may,  Dividends. 
at  certain  times,  and  in  such  manner  as  its  by-laws  prescribe,  declare 
and  pay  dividends  to  depositors  and  stockholders  of  so  much  of 
the  profits  of  the  bank,  and  of  the  interest  arising  from  the  capital, 
surplus  and  deposits,  as  may  be  appropriated  for  that  purpose  under 
its  by-laws  or  under  its  agreements  with  depositors,  but  every  such 
bank  shall,  before  the  declaration  of  any  such  dividend,  carry  at 
least  one-tenth  part  of  the  net  profits  of  the  stockholders  for  the  pre- 
ceding half  year,  or  for  such  period  as  is  covered  by  the  dividend,  to 
its  surplus,  until  such  surplus  shall  amount  to  twenty-five  per  centum 
of  its  paid-up  capital  stock.  The  whole  or  any  part  of  such  surplus, 
if  held  as  the  exclusive  property  of  the  stockholders,  may  at  any 
time  be  converted  into  paid-in  capital,  in  which  event  such  surplus 
shall  be  restored  in  the  manner  above  provided  until  it  amounts  to 
twenty-five  per  centum  of  the  aggregate  paid-up  capital  stock. 
Subject  to  the  provisions  of  section  nineteen  of  this  act,  any  losses 
sustained  by  any  such  bank  in  excess  of  its  undivided  profits  may  be 
charged  to  and  paid  from  its  surplus,  in  which  event  such  surplus 
shall  be  restored  in  the  manner  above  provided,  to  the  amount 
required  by  law;  provided,  horvever,  that  any  bank  which  has 
invested  any  portion  of  its  surplus  in  its  bank  premises,  furniture  and 
fixtures,  vaults,  or  safe  deposit  vaults  and  boxes  necessary  or  proper 
to  carry  on  its  banking  business  shall  not  be  permitted  to  charge  any 
loss  to  that  portion  of  its  surplus  so  invested.  A  larger  surplus  may 
be  created  and  nothing  herein  contained  shall  be  construed  as 
prohibitory  thereof.  The  capital  and  assets  of  any  such  bank  are 
a  security  to  depositors  and  stockholders,  depositors  having  the  * 
priority  of  security  over  stockholders. 

Sec.  21a.     No  bank,  banker,  or  bank  officer  shall  give  prefer-   Pledging  of 
ence  to  any  depositor  or  creditor  by  pledging  the  assets  of  the  bank   assets. 
as    collateral    security,    except    as    otherwise    authorized    by    law; 
provided,  that  any  commercial  bank,  or  commercial  department  of  a 
departmental  bank,  may  borrow  money  for  temporary  purposes,  and 


26  N.    W.    HALSEY    &   CO. 


may  pledge  assets  of  said  commercial  bank,  or  commercial  depart- 
ment of  said  departmental  bank,  not  exceeding  fifty  per  centum  in 
excess  of  the  amount  borrowed,  as  collateral  security  therefor; 
provided,  that  any  public  moneys,  or  postal  savings  moneys, 
deposited  with  any  such  bank  under  any  provision  of  law,  shall  not 
be  construed  as  "borrowed  money"  within  the  meaning  of  this 
section.  No  bank  shall  at  any  time,  without  permission  of  the 
superintendent  of  banks,  borrow  an  amount  exceeding  the  amount  of 
its  paid-up  capital  stock  and  surplus  at  such  time  actually  paid  in 
and  remaining  undiminished  by  losses  or  otherwise.  No  bank  shall 
make  partial  payments  upon  any  certificate  of  deposit.  In  no  case 
shall  an  overdraft  of  more  than  ninety  days'  standing  be  allowed 
as  an  asset  of  any  bank.  Any  debt  due  to  any  commercial  bank, 
on  which  interest  is  past'  due  and  unpaid  for  the  period  of  one 
year,  unless  the  same  is  well  secured,  and  is  in  process  of  collection, 
shall  be  considered  a  bad  debt  and  shall  be  charged  off  to  the 
profit  and  loss  account  at  the  expiration  of  that  time. 

Department  Sec.  22.  Any  corporation  authorized  by  its  articles  of  incorpo- 
banks.  ration  so  to  do,  may  combine  the  business  of  a  commercial  bank  and 
savings  bank  and  trust  company,  or  any  one  or  more  or  all  of  them; 
provided,  that  no  corporation  authorized  to  transact  a  trust  business 
and  which  is  also  organized  to  engage  in  the  business  of  title 
insurance,  shall  engage  in  or  combine  the  business  of  a  commercial 
bank  or  savings  bank. 

Paid-up  Sec.  23.  When  a  bank  desires  to  do  a  departmental  business, 
capital  required.  jt  sHall  first  obtain  the  consent  of  the  superintendent  of  banks,  and 
in  its  application  therefor,  file  a  statement  making  a  segregation  of 
its  capital  and  surplus  for  each  department.  Such  capital  and 
surplus,  when  so  apportioned  and  approved  by  the  superintendent  of 
banks,  shall  be  considered  and  treated  as  the  separate  capital  and 
surplus  of  such  department  as  if  each  department  was  a  separate 
bank.  Thereafter  a  bank  may,  from  time  to  time,  with  the  previous 
consent  and  approval  of  the  superintendent  of  banks  and  subject  to 
the  provisions  of  section  nineteen  of  this  act,  change  any  segregation 
and  apportionment  of  capital  and  surplus  previously  made  and  make 
a  new  segregation   and  apportionment  of   its   capital   and   surplus. 


BANK   ACT   OF   CALIFORNIA  27 

Every  bank  hereafter  organized  doing  a  departmental  business  shall 
have  paid  up,  in  cash,  capital  stock  as  follows: 

(a)  In  any  locality  in  which  the  population  does  not  exceed 
five  thousand  persons,  not  less  than  twenty-five  thousand  dollars  if  it 
transacts  both  a  commercial  and  savings  business,  or  not  less  than 
one  hundred  twenty-five  thousand  dollars,  if  it  transacts  both  a  com- 
mercial and  trust  business,  or  not  less  than  one  hundred  twenty-five 
thousand  dollars  if  it  transacts  both  a  savings  and  trust  business, 
and  not  less  than  one  hundred  twenty-five  thousand  dollars  if  it 
transacts  a  commercial,  savings  and  trust  business. 

(fc)  In  any  city  in  which  the  population  is  more  than  five 
thousand  persons,  but  does  not  exceed  twenty-five  thousand  persons, 
not  less  than  fifty  thousand  dollars  if  it  transacts  both  a  commercial 
and  savings  business,  or  not  less  than  one  hundred  fifty  thousand 
dollars  if  it  transacts  both  a  commercial  and  trust  business,  or  not 
less  than  one  hundred  fifty  thousand  dollars  if  it  transacts  both  a 
savings  and  trust  business,  and  not  less  than  one  hundred  fifty 
thousand  dollars  if  it  transacts  a  commercial,  savings  and  trust 
business. 

(c)  In  any  city  in  which  the  population  is  more  than  twenty-five 
thousand  persons  but  does  not  exceed  one  hundred  thousand  persons, 
not  less  than  one  hundred  thousand  dollars,  if  it  transacts  both  a 
commercial  and  savings  business,  or  not  less  than  two  hundred 
thousand  dollars  if  it  transacts  both  a  commercial  and  trust  business, 
or  not  less  than  two  hundred  thousand  dollars  if  it  transacts  both 
a  savings  and  trust  business,  and  not  less  than  two  hundred  thousand 
dollars  if  it  transacts  a  commercial,  savings  and  trust  business. 

(J)  In  any  city  in  which  the  population  is  more  than  one 
hundred  thousand  persons  but  does  not  exceed  two  hundred 
thousand  persons,  not  less  than  two  hundred  thousand  dollars,  if  it 
transacts  both  a  commercial  and  savings  business,  or  not  less  than 
four  hundred  thousand  dollars  if  it  transacts  both  a  commercial  and 
trust  business,  or  not  less  than  four  hundred  thousand  dollars  if  it 
transacts  both  a  savings  and  trust  business,  and  not  less  than  four 
hundred  thousand  dollars  if  it  transacts  a  commercial,  savings  and 
trust  business. 


28 N.    W.    HALSEY    &   CO. 

(e)  In  any  city  in  which  the  population  exceeds  two  hundred 
thousand  persons,  not  less  than  three  hundred  thousand  dollars,  if  it 
transacts  both  a  commercial  and  savings  business,  or  not  less  than 
five  hundred  thousand  dollars  if  it  transacts  both  a  commercial  and 
trust  business,  or  not  less  than  five  hundred  thousand  dollars  if  it 
transacts  both  a  savings  and  trust  business,  and  not  less  than  five 
hundred  thousand  dollars  if  it  transacts  a  commercial,  savings  and 
trust  business. 

The  foregoing  classification  shall  not  apply  to  any  bank  already 
in  existence  which  has  received  from  the  superintendent  of  banks  a 
certificate  to  do  a  banking  business;  nor  to  any  bank  the  location 
of  which  shall  have  been  included  by  annexation  or  consolidation 
within  the  limits  of  a  city  of  a  class  requiring  a  larger  capitalization, 
but  no  bank  thus  excepted  shall  be  permitted  to  establish  any  new 
branch  office,  as  provided  in  section  nine  of  this  act  or  to  remove 
its  place  of  business  from  the  original  limits  of  the  city  or  township 
wherein  it  was  located  prior  to  such  annexation  or  consolidation 
until  it  shall  have  the  capital  required  of  banks  in  such  city  not 
within  said  exception.  Such  excepted  banks  may  not  in  any  case 
decrease  their  capital  stock  but  may  increase  the  same  in  the  manner 
provided  by  law  to  an  amount  either  greater  or  less  than  that 
required  of  banks  in  such  city  not  within  said  exception.  The 
capital  stock  referred  to  herein  shall  be  increased  from  time  to  time 
and  to  the  same  extent  as  provided  for  in  section  nineteen  of  this 
act.  For  the  purposes  of  this  act,  the  population  shown  and  deter- 
mined by  the  last  preceding  federal  census,  or  any  subsequent  census 
compiled  and  certified  under  any  law  of  this  state,  shall  be  deemed 
to  be  the  population  of  any  city  in  which  any  such  bank  is  to  be 
organized.  If  the  principal  place  of  business  of  any  bank  so 
organized  is  located  outside  of  the  corporate  limits  of  any  city,  then 
the  population  of  that  portion  of  the  judicial  township  in  which  said 
bank  is  to  have  its  principal  place  of  business,  which  is  not  included 
within  the  boundaries  of  any  municipal  corporation,  as  such  popula- 
tion is  shown  and  determined  by  such  federal  or  subsequent  official 
census,  shall  be  the  basis  for  classification  under  the  provisions  of 
this  act. 


BANK   ACT   OF   CALIFORNIA  29 

Sec.  24.     Every  bank,  before  it  commences  to  do  business  or   Certificate  of  the 
before    it   opens    a    new    department    and    commences    to    transact  superintendent 
business  in  or  under  such  new  department,  shall  obtain  the  certificate  of  banks. 
of   the   superintendent   of   banks   for   the   opening  of   each   of   the 
departments  specified.     Each  certificate  herein  provided  for  shall  be 
given  when  the  superintendent  shall,  by  the  examination  required  by 
this  act,  have  satisfied  himself  that  the  proper  amount  of  cash  has 
been  paid  in  as  capital  and  the  provisions  of  this  act  complied  with. 
The  applicant  shall  pay  for  the  certificate  for  each  department  a 
fee  of  fifty  dollars. 

Sec.   25.      Every  bank  shall   maintain   for  each   department   a   Lawful  money 
lawful  money  reserve  equal  in  amount  to  that  required  by  this  act   reserve  required 
for  the    respective    business    conducted,    and    shall    keep    separate   for  each 
and  distinct  the  lawful  money  reserve  of  any  department  from  that   department. 
of  any  other  department;  and  all  deposits  made  with  other  banks,   Relations  of 
whether  temporary  or  otherwise,   shall  be  assets   of   the  respective   departments. 
departments  by  which  they  were  made,  and  shall  be  so  carried  on 
the  books  of  such  other  banks,  and  shall  be  repaid  only  upon  the 
order  of  the  department  to  whose  credit  they  stand.      No  depart-   Deposits. 
ment  shall   receive   deposits  of  any   other  department  of   the  same 
corporation;  except  that  a  trust  department  may  make  deposits  of 
trust  or  any  other  funds  under  its  control  with  the  commercial  or 
savings    department   of   the    same   corporation;    provided,   however, 
that  any  bank  having  departments  shall  have  the  right  to  sell  and 
transfer    any   bonds,    securities    or    loans    from    one   department    to 
another  upon  receipt  of  the  actual  value   thereof,   if  such   bonds, 
securities  or  loans   are,  under  the  provisions  of  this   act,    a   legal 
investment  for  the  department  purchasing  the  same. 

Sec.  26.     Every  bank  having  different  departments  shall  keep    Separate 
separate  books  of  account  for  each  department  of  its  business,  and    books. 
shall  be  governed  as  to  all  deposits,  reserves,  investments,  and  trans- 
actions relating  to  each  department  by  the  provisions   in   this  act 
specifically  provided  for  the  respective  kind  of  business. 

It  shall  keep  all  investments  relating  to  the  savings  department    Separate 
entirely  separate  and  apart  from  the  investments  of  its  other  depart-    investments. 
ment  or  departments. 


30  N.    W.    HALSEY    &   CO. 


Separate       Every  bank  shall  conduct  the  business  of  all  its  departments  in 

cash  securities  one   building,    or   in   adjoining   buildings,    and   shall    keep   entirely 

and  property,  separate   and   apart   in   each   department   the   cash,    securities     and 

property  belonging  to   such  department,   and   shall   not  mingle   the 

cash,    securities     and    property    of    one    department    with    that    of 

another. 

Assets  of  each  Sec.  27.  All  money  and  assets  belonging  to  each  department, 
department,  whether  on  hand  or  with  other  banks,  and  the  investments  made, 
shall  be  held  solely  for  the  repayment  of  the  depositors  and  other 
claimants  of  each  such  department,  as  herein  provided,  until  all 
depositors  and  other  claimants  of  each  such  department  shall  have 
been  paid,  and  the  overplus  then  remaining  shall  be  applied  to  any 
other  liabilities  of  such  bank. 

Kind  of       Sec.  28.     Every  bank  in  this  state  must,  on  all  its  window  signs 

banking  business  ancJ  jn  advertising,  and  on  letterheads  and  other  stationery  on  which 

transacted  must  frs  bUSmess  is  transacted,  use  the  word  "savings"  if  it  conducts  a 

be  advertised.  savjngs  business,  or  the  word  "trust"  if  it  conducts  a  trust  business, 

and  the  word  "commercial"  if  it  conducts  a  commercial  business. 

Steps  necessary)       Sec.  29.     Every  corporation  heretofore  created  under  the  laws 
to  convert  a  0f  this  state,  doing  a  banking  business  therein,  and  which  has  no 
banking  capital  stock,   may  elect  to  have  a   capital  stock,   and  may   issue 
corporation  certificates   of   stock  therefor,   in  the  same  manner  as   corporations 
without  capital  formed  uncJer  tfte  provisions  of  part  IV,  title  1 ,  chapter  I,  article  I, 
stock  into  0f    the    Civil    Code,    relating    to    the    formation    of    corporations ; 
?c^  provided,  that  no  such  corporation  shall  use  or  convert  any  moneys 
•  or  funds  theretofore  belonging  to  it,  or  under  its  control,  into  capital 
stock;  but  such  funds  or  moneys  must  be  held  and  managed  only 
for  the  purposes  and  in  the  manner  for  which  they  were  created. 
Before  such  change  is  made,  a  majority  of  the  members  of  such 
corporation  present  at  a  meeting  called  for  the  purpose  of  consider- 
ing the  proposition  whether  it  is  best  to  have  a  capital  stock,   its 
amount,  and  the  number  of  shares  into  which  it  shall  be  divided, 
must  vote  in  favor  of  having  a  capital  stock,  fix  the  amount  thereof, 
and  the  number  of  shares  into  which  it  shall  be  divided.     Notice  of 
the  time  and  place  of  holding  such  meeting,  and  its  object,  must  be 
given  by  the  president  of  such  corporation  by  mailing  notice  of  such 


BANK   ACT   OF   CALIFORNIA  31 

meeting  to  each  member  of  such  corporation  at  his  last  known  post 
office  address  at  least  ten  days  prior  to  the  day  fixed  for  such 
meeting,  and  by  publication  in  some  newspaper  printed  and  pub- 
lished in  the  county,  or  city  and  county,  in  which  the  principal  place 
of  business  of  the  corporation  is  situated,  at  least  once  a  week  for 
three  successive  weeks  prior  to  the  holding  of  the  meeting.  A  copy 
of  the  proceedings  of  this  meeting,  giving  the  number  of  persons 
present,  the  votes  taken,  the  notice  calling  the  meeting,  the  proof  of 
its  publication,  the  amount  of  capital  actually  subscribed,  and  by 
whom,  all  duly  certified  by  the  president  and  secretary  of  the 
corporation,  must  be  filed  in  the  office  of  the  secretary  of  state  and 
clerk  of  the  county  where  the  articles  of  incorporation  are  filed. 
Thereafter  such  corporation  is  possessed  of  all  the  rights  and  powers, 
and  is  subject  to  all  the  obligations,  restrictions  and  limitations,  as 
if  it  had  been  originally  created  with  a  capital  stock. 

Sec.  30.  Any  bank  may  conduct  a  safe  deposit  department,  Safe  deposit 
but  shall  not  invest  more  than  one-tenth  of  its  capital  and  surplus  department. 
in  such  safe  deposit  department. 

Sec.  3 1 .  Any  bank  may  sell  the  whole  of  its  business  or  the  Sale  or  purchase 
whole  of  the  business  of  any  of  its  departments  to  any  other  bank  of  assets  of 
which  may  purchase  such  business  after  obtaining  the  consent  of  the  banks. 
stockholders  of  the  selling  and  of  the  purchasing  banks  holding  of 
record  at  least  two-thirds  of  the  issued  capital  stock  of  each  of  such 
corporations;  such  consent  to  be  expressed  either  in  writing  executed 
and  acknowledged  by  such  stockholders  and  attached  to  the  instru- 
ment of  sale,  or  to  a  copy  thereof,  or  by  vote  at  a  stockholders* 
meeting  of  each  of  such  banks  called  for  that  purpose.  The  selling 
and  purchasing  banks  must  for  such  purposes  enter  into  an  agree- 
ment of  sale  and  purchase,  which  agreement  shall  contain  all  the 
terms  and  conditions  connected  with  such  sale  and  purchase.  Such 
agreement  shall  contain  proper  provision  for  the  payment  of  liabilities 
of  the  selling  bank  or  of  the  department  sold,  and  in  this  particular 
shall  be  subject  to  the  approval  of  the  superintendent  of  banks;  and 
shall  not  be  valid  until  such  approval  is  obtained.  Such  agreement 
may  contain  provisions  for  the  transfer  of  all  deposits  to  the  pur- 
chasing bank,  subject,  however,  to  the  right  of  every  depositor  of 
the  selling  bank  to  withdraw  his  deposit  in  full  on  demand  after 


32 N.    W.    HALSEY   &   CO. 

such  transfer,  irrespective  of  the  terms  under  which  it  was  deposited 
with  the  selling  bank.  The  rights  of  creditors  of  the  selling  bank 
shall  not  in  any  manner  be  impaired  by  any  such  sale,  nor  shall  any 
liability  or  obligation  for  the  payment  of  any  money  due  or  to 
become  due,  or  any  claim  or  demand,  in  any  manner,  or  for  any 
cause  existing  against  such  selling  bank  or  against  any  stockholder 
thereof,  be  in  any  manner  released  or  impaired,  and  all  the  rights, 
obligations,  and  relations  of  all  the  parties,  creditors,  depositors, 
trustees  and  beneficiaries  of  trusts  shall  remain  unimpaired  by  the 
sale,  but  such  bank  to  which  the  other  shall  sell  all  its  business  or 
all  the  business  of  any  of  its  departments,  shall  succeed  to  all  such 
relations,  obligations,  trusts,  and  liabilities  and  be  held  liable  to 
pay  and  discharge  all  such  debts  and  liabilities  and  to  perform  all 
such  trusts  of  the  selling  bank  in  the  same  manner  as  if  such  bank 
to  which  the  other  had  sold  had  itself  incurred  the  obligation  or 
liability  or  assumed  the  relation  of  trust,  and  the  stockholders  of  the 
respective  corporations  so  entering  into  such  agreement  shall  con- 
tinue subject  to  all  the  liabilities,  claims  and  demands  existing 
against  them  as  such  at  or  before  such  sale.  Immediately  after  the 
execution  of  such  agreement  of  sale  and  purchase  notice  thereof  shall 
be  published  for  at  least  four  successive  weeks  in  a  newspaper  in 
each  of  the  counties  of  the  state  in  which  either  of  such  banks  shall 
have  its  principal  place  of  business;  provided,  however,  that  no 
action  can  be  brought  against  such  selling  bank  or  any  of  its  stock- 
holders on  account  of  any  deposits  so  transferred  after  the  expira- 
tion of  one  year  from  the  last  day  of  publication  herein  required. 
An  affidavit  showing  such  publication  shall  be  filed  in  the  office  of 
the  superintendent  of  banks  within  ten  days  after  the  last  publication 
thereof.  The  affairs  of  such  selling  bank,  or  selling  department  of 
a  bank,  shall  remain  subject  to  the  provisions  of  this  act. 

Agreement  of  Sec.  31  a.  Any  bank  incorporated  under  the  laws  of  this  state 
sale  and  may  consolidate  with  one  or  more  banks  incorporated  under  the  laws 
purchase,  of  this  state,  its  capital  stock,  properties,  trusts,  claims,  demands, 
contracts,  agreements,  obligations,  debts,  liabilities  and  assets  of 
every  kind  and  description,  upon  such  terms  and  in  such  manner  as 
may  be  agreed  upon  by  their  respective  boards  of  directors,  a  copy 
of  which  agreement  must  be  filed  in  the  office  of  the  superintendent 


BANK   ACT   OF   CALIFORNIA  33 


of  banks ;  provided,  that  such  agreement  shall  be  subject  to  the  Provisions  of 
approval  of  the  superintendent  of  banks  and  shall  not  be  valid  until  agreement. 
such  approval  be  obtained;  provided,  further,  that  no  such  consoli- 
dation shall  take  effect  until  such  agreement  shall  have  been  ratified 
and  confirmed  in  writing  by  the  stockholders  of  the  respective  banks 
holding  of  record  at  least  two-thirds  of  the  issued  capital  stock  of 
their  respective  banks,  or  such  agreement  may  be  submitted  to  the 
stockholders  of  each  of  such  corporations  at  a  meeting  thereof  to 
be  called  upon  notice  specifying  the  time,  place  and  object  thereof, 
addressed  to  each  stockholder  at  his  last  known  post  office  address 
and  deposited  in  the  post  office,  postage  prepaid,  at  least  two  weeks 
prior  to  the  date  fixed  for  said  meeting,  and  published  for  at  least 
two  successive  weeks,  prior  to  the  date  of  said  meeting,  in  a  news- 
paper in  each  of  the  counties  of  the  state  in  which  any  of  such 
banks  shall  have  its  principal  place  of  business,  and  if  such  agree- 
ment shall  be  approved  at  each  of  such  meetings  of  the  respective 
stockholders  separately  by  the  vote  or  ballot  of  the  stockholders 
owning  at  least  two-thirds  of  the  stock  of  each  such  bank,  the  same 
shall  be  the  agreement  of  such  banks.  In  case  of  such  consolida- 
tion "articles  of  incorporation  and  consolidation"  must  be  prepared, 
setting  forth: 

First.     The  name  of  the  new  corporation;  Name. 

Second.     The  purpose  for  which  it  is  formed;  Purpose. 

Third.     The  place  where  its  principal  business  is  to  be  transacted ;  Place. 

Fourth.     The  term  for  which  it  is  to  exist,  which  shall  not  exceed 
fifty  years; 

Fifth.     The  number  of  its  directors  (which  shall  not  be  less  than  Number  of 
three)  and  the  names  and  residences  of  the  persons  appointed  to  act  directors. 
as  such  until  their  successors  are  elected  and  qualified; 

Sixth.     The  amount  of  its  capital  stock  and  the  number  of  shares  Amount  of 
into  which  it  is  divided;  capital. 

Seventh.      The   amount  of  stock  actually    subscribed,     and    by 
whom; 

Eighth.     The  names  of  the  constituent  corporations. 

Said  articles  of  incorporation  and  consolidation  must  be   signed  Instructions  for 
and  countersigned  by  the  president  and  secretary  of  each  constituent  incorporation  and 
corporation  and  sealed  with  their  corporate  seals.     There  must  be  consolidation. 


34  N.    W.    HALSEY    &   CO. 

annexed  thereto  the  approval  of  the  superintendent  of  banks  and 
memoranda  of  the  ratification  and  confirmation  thereof  by  the  stock- 
holders of  each  constituent  corporation,  which  must  be  respectively 
signed  and  acknowledged  by  stockholders  representing  at  least  two- 
thirds  of  the  capital  stock  of  their  respective  corporations.  When 
completed  as  aforesaid  said  articles  must  be  filed  in  the  office  of 
the  county  clerk  of  the  county  in  which  is  located  the  principal  place 
of  business  of  the  new  corporation,  and  a  copy  of  the  articles  of 
incorporation  and  consolidation  certified  by  such  county  clerk  must 
be  filed  in  the  office  of  the  secretary  of  state,  and  a  copy  of  the 
articles  of  incorporation  and  consolidation  certified  by  said  secretary 
of  state  must  be  filed  in  the  office  of  the  superintendent  of  banks, 
and  also  in  the  office  of  the  county  clerk  of  any  county  in  which 
were  filed  the  original  articles  of  incorporation  of  either  of  the  con- 
stituent corporations,  and  thereupon  each  constituent  corporation 
named  therein  must  be  deemed  and  held  to  have  become  extinct  in 
all  courts  and  places,  and  said  new  corporation  must  be  deemed  and 
held  in  all  courts  and  places  to  have  succeeded  to  all  their  several 
capital  stocks,  properties,  trusts,  claims,  demands,  contracts,  agree- 
ments, assets,  choses  and  rights  in  action  of  every  kind  and  descrip- 
tion, both  at  law  and  in  equity,  and  to  be  entitled  to  possess,  enjoy, 
and  enforce  the  same  and  every  thereof,  as  fully  and  completely  as 
either  and  every  of  its  constituents  might  have  done  had  no  con- 
solidation taken  place.  Said  consolidated  or  new  corporation  must 
also,  in  all  courts  and  places,  be  deemed  and  held  to  have  become 
subrogated  to  its  several  constituents  and  each  thereof,  in  respect  to 
all  their  contracts  and  agreements  with  other  parties,  and  all  their 
debts,  obligations,  and  liabilities,  of  every  kind  and  nature,  to  any 
persons,  corporations,  or  bodies  politic,  whomsoever,  or  whatsoever, 
and  said  new  corporation  must  sue  and  be  sued  in  its  own  name  in 
any  and  every  case  in  which  any  or  either  of  its  constituents  might 
have  sued  or  might  have  been  sued  at  law  or  in  equity  had  no  such 
consolidation  been  made.  Nothing  in  this  section  contained  shall  be 
construed  to  impair  the  obligation  of  any  contract  to  which  any  of 
such  constituents  were  parties  at  the  date  of  such  consolidation.  All 
such  contracts  may  be  enforced  by  action  or  suit,  as  the  case  may 
be,  against  the  consolidated  corporation,  and  satisfaction  obtained 
out  of  the  property  which,  at  the  date  of  the  consolidation,  belonged 


BANK   ACT   OF   CALIFORNIA 35 

to  the  constituent  which  was  a  party  to  the  contract  in  action  or  suit, 
as  well  as  out  of  any  other  property  belonging  to  the  consolidated 
corporation,  and  the  stockholders  of  each  constituent  corporation  so 
entering  into  such  agreement  shall  continue  subject  to  all  the  liabili- 
ties, claims  and  demands  existing  against  them  at  or  before  such 
consolidation  to  the  same  extent  as  if  the  same  had  not  been  made. 
The  right  of  said  new  corporation  to  increase  or  decrease  its  capital 
stock,  to  change  the  number  of  its  directors,  to  amend  its  articles  of 
incorporation,  to  change  its  principal  place  of  business,  or  its  name, 
or  to  effect  any  other  organic  change  shall  be  governed  by  the 
general  corporation  laws  of  this  state  and  by  the  bank  act,  and 
the  procedure  to  effect  any  such  change  shall  be  that  denned  by 
the  general  corporation  laws  and  the  bank  act. 

Sec.   32.     Any  bank  receiving  trust  funds  in  accordance  with   Trust  funds 
the  provisions  of  this  act  relating  to  trust  companies  must  not  mingle  must  be  fcep/ 
such  trust  funds  with  the  other  assets  of  the  corporation,  except  as   separate. 
otherwise  provided  in  section  twenty-five  of  this  act,  and  such  funds 
shall  not  be  carried  or  counted  as  any  part  of  the  lawful  money 
reserve  provided   for  in  this  act.      The  officers  of   any  bank  who 
knowingly  violate  or  consent  to  the  violation  of  this  provision  shall 
be  guilty  of  a  felony. 

Section  thirty-three  repealed  1913. 

Sec.  34.     No  bank  shall  purchase  or  invest  its  capital  or  surplus  No  bank  ma$ 
or  money  of  its  depositors,  or  any  part  of  either,  in  shares  of  its   invest  in  or  loan 
own   capital   stock ;   nor  loan  its  capital  or  surplus  or   the  money   on  shares  of  its 
of  its  depositors,  or  any  part  of  either,  on  shares  of  its  own  capital  oD,n  capital  stock. 
stock,  unless  such  purchase  or  loan  shall  be  necessary  to  prevent  loss 
to  such  bank  on  debts  previously  contracted  in  good  faith.     Every 
person  or  corporation  violating  any  provision  of   this  section  shall 
forfeit  to  the  people  of  the  state  twice  the  nominal  amount  of  such 
stock. 

Sec.   35.      No  director,  or  officer,   or  employee,  or  controlling  Transactions 

stockholder  of  any  bank  shall,  directly  or  indirectly,  for  his  own  between  a  bank 

account,  for  himself,  or  as  the  partner  or  agent  of  others,  sell  or  and  its  directors, 

transfer,  or  cause  to  be  sold  or  transferred  to  the  bank  of  which  he  officers  or 

is    a    director,    officer,    employee,    or    controlling    stockholder,    any  employees. 


36 N.   W.    HALSEY    &   CO. 

note  or  bond  secured  by  any  mortgage  or  trust  deed  on  real  estate 
or  any  contract  arising  from  the  sale  of  real  estate  in  which  such 
director,  or  officer,  or  employee,  or  controlling  stockholder  is  per- 
sonally or  financially  interested,  without  the  consent  in  writing  of 
the  superintendent  of  banks.  Any  director,  or  officer,  or  employee, 
or  controlling  stockholder  of  any  bank  who  knowingly  violates  or 
consents  to  the  violation  of  this  provision  shall  be  guilty  of  a  felony. 

Limitation  of      Sec.  36.     No   bank   receiving    deposits   of   money   shall 

bond  purchase  purchase,  agree  to  purchase,  underwrite  or  guarantee  any 

or  underwriting,  bond  issue  in  excess  of  five  per  centum  of  its  assets,  except 

bonds  of  the  United  States,  of  the  State  of  California,  of 

the  cities,  cities  and  counties,  counties  or  school  districts 

of  this  state. 

Investment  in  Sec.  37.  No  bank  shall  purchase  or  invest  its  capital  or  surplus 
stocks  prohibited,  or  money  of  its  depositors,  or  any  part  of  either,  in  the  capital  stock 
of  any  corporation  unless  the  purchase  or  acquisition  of  such  capital 
stock  shall  be  necessary  to  prevent  loss  to  the  bank  on  a  debt  pre- 
viously contracted  in  good  faith.  Any  capital  stock  so  purchased  or 
acquired  shall  be  sold  by  such  bank  within  six  months  thereafter  if 
it  can  be  sold  for  the  amount  of  the  claim  of  such  bank  against  it; 
and  all  capital  stock  thus  purchased  or  acquired  must  be  sold  for 
the  best  price  obtainable  by  said  bank  within  one  year  after  such 
purchase  or  acquisition.  Every  person  or  corporation  violating  any 
provision  of  this  section  shall  forfeit  to  the  people  of  the  state  twice 
the  nominal  amount  of  such  stock. 

False  entries.  Sec.  38.  A  director,  officer,  agent  or  employee  of  any  bank 
who. 

First — Knowingly  receives  or  possesses  himself  of  any  of  its 
property  otherwise  than  in  payment  for  a  just  demand,  and  with 
intent  to  defraud,  omits  to  make  or  to  cause  or  direct  to  be  made  a 
full  and  true  entry  thereof  in  its  books  and  accounts;  or, 

Second — Concurs  in  omitting  to  make  any  material  entry  thereof; 
or, 

Third — Knowingly  concurs  in  making  or  publishing  any  written 
report,  exhibit  or  statement  of  its  affairs  or  pecuniary  condition  con- 
taining any  material  statement  which  is  false;    or, 


BANK   ACT   OF   CALIFORNIA 37 

Fourth — Having  the  custody  or  control  of  its  books,  wilfully 
refuses  or  neglects  to  make  any  proper  entry  in  the  books  of  such 
corporation  as  required  by  law,  or  to  exhibit  or  allow  the  same  to 
be  inspected  and  extracts  to  be  taken  therefrom  by  the  superintendent 
of  banks,  his  chief  deputy,  or  any  of  his  examiners,  shall  be  guilty 
of  a  felony. 

Sec.  39.     Any  officer,  director,  agent,  teller,  clerk  or  employee  Overdrafts  fev 
of  any  bank  who  either,  persons  connected 

First — Knowingly  overdraws  his  account  with  such  bank,  and 
thereby  obtains  the  money,  notes   or  funds  of  any  such  bank;  or. 

Second — Asks  or  receives  or  consents  or  agrees  to  receive  any 
commissions,  emolument,  gratuity  or  reward,  or  any  money,  property 
or  thing  of  value,  for  his  own  personal  benefit,  or  of  personal 
advantage,  for  procuring  or  endeavoring  to  procure  for  any  person, 
firm  or  corporation  any  loan  from,  or  the  purchase  or  discount  of 
any  paper,  note,  draft,  check  or  bill  of  exchange,  by  such  bank,  or 
for  permitting  any  person,  firm  or  corporation  to  overdraw  any 
account  with  such  bank,  is  guilty  of  a  felony. 

Sec.    40.      No    bank    mentioned    in    this    act    shall    make    any  Stockholders* 
contract  with  any  of  its  depositors  whereby  the  stockholders'  liability  liability)  cannot 
provided   for  by   the   constitution   of   this   state   is   in   any   manner  be  waived. 
waived,  and  if  any  such  contract  shall  be  so  made,  such  contract 
shall  be  void. 

Sec.  4 1 .     No  officer,  director,  agent,  or  other  employee  of  any  Purchase  of 
bank  shall  directly  or  indirectly,  for  his  own  personal  benefit,  pur-  obligations  of 
chase,  or  be  interested  in  the  purchase,  of  any  obligation  of  said  banks  fep 
bank  for  a  less  sum  than  shall  appear  upon  the  face  of  such  obliga-  directors. 
tion  to  be  the  value  thereof.     Every  person  violating  any  provision 
of  this  section,  shall  for  each  offense  forfeit  to  the  people  of  the 
state,  three  times  the  face  value  of  any  such  obligation  so  purchased. 

Sec.  42.     No  officer,  director,  agent  or  other  employee  of  any  Purchase  of 
bank,    shall    directly   or    indirectly,    for    his   own    personal    benefit,  assets  of  bank 
purchase,  or  be  interested  in  the  purchase  of  any  of  the  assets  of  by  directors,  etc. 
said  bank   for   a  less   sum  than  the  current  market  value  thereof. 
Every  person  violating  any  provision  of  this  section,  shall  for  each 


38  N.   W.    HALSEY   &   CO. 

offense,  forfeit  to  the  people  of  the  state,  twice  the  nominal  amount 
of  any  such  assets  so  purchased. 

Deposits  with       Sec.  43.     No  bank  shall  deposit  any  of  its  funds  in  any  other 

other  banks  bank  unless  such  other  bank  has  been  designated  as  a  depositary 

must  be  for  its  funds  by  the  vote  of  a  majority  of  the  directors  or  trustees 

authorized  by  of    the   bank   making   the   deposit,    exclusive   of    the   vote   of    any 

disinterested  director  who  is  an  officer,  director,  or  trustee  of  the  depositary  so 

directors,  designated;   provided,   however,   that  any  bank  may  designate  any 

other  bank   its  depositary  by  vote  of   a   majority  of  its   directors, 

including   the  vote  of   any   director   or   trustee   who   is   an   officer, 

director   or  trustee  of  the  depositary  so  designated,  if  such  bank  has 

secured  the  previous  approval  of  the  superintendent  of  banks,  which 

approval  he  may  at  any  time  revoke  for  proper  cause. 

Loans  secured  Sec.  44.  No  bank  shall  hereafter  make  a  loan  secured  by  the 
by  stocks  of  stock  of  another  bank,  if  by  making  such  loan  the  total  stock  of 
other  banks,  such  other  bank  held  by  such  loaning  bank  as  collateral  will  exceed 
in  the  aggregate  twenty-five  per  centum  of  the  capital  stock  of  such 
other  bank;  provided,  that  no  loan  upon  the  capital  stock  of  any 
bank  shall  be  made  unless  such  bank  has  been  in  existence  at  least 
two  years  and  has  earned  and  paid  a  dividend  upon  its  capital 
stock;  and  provided,  further,  that  no  bank  may  loan  more  than  five 
per  centum  of  its  assets  upon  the  capital  stock  of  any  corporation 
whatsoever  as  collateral  security. 

Unpaid  interest.       Sec.  45.     Interest  unpaid,   although  due  or  accrued,   on  debts 
owing  to  any  bank,  shall  not  be  included  in  calculation  of  its  profits 
previous  to  a  dividend. 
Limitation  of      Sec.  46.     No  bank  shall  invest  or  loan  more  than  five 
investment  per  centum  of  its  assets  in  any  one   bond  issue,   except 
in  bonds,  bonds  of  the  United  States,  of  the  State  of  California,  of 
the  counties,  cities  and  counties,  cities  or  school  districts 
of  this  state. 
Loans  on  real       Sec.  47.     No  commercial  bank  shall,  except  for  the  purpose  of 
estate  must  be  facilitating  the  sale  of  property  owned  by  the  bank,  make  any  loan 
a  first  lien,  on  the  security  of  real  estate,  unless  it  is  a  first  lien  and  is  either 

(1.)  Made  for  a  period  of  time  not  exceeding  six  months  and 
upon  security  worth  fifteen  per  centum  more  than  the  market  value 
of  the  real  estate  taken  as  security;    or 


BANK   ACT   OF   CALIFORNIA 39 

(2.)  Made  for  a  period  of  time  exceeding  six  months  and  not 
exceeding  ten  years  and  does  not  exceed  sixty  per  centum  of  the 
market  value  of  the  real  estate  taken  as  security. 

No  commercial  bank  shall  loan  in  the  aggregate  more  than  thirty- 
five  per  centum  of  its  assets  on  real  estate  loans  of  the  character 
specified  in  subdivision  two  of  this  section.  These  provisions,  how- 
ever, shall  not  prevent  any  bank  from  taking  another  and  imme- 
diately subsequent  mortgage  or  deed  of  trust  thereon  when  it  already 
holds  a  first  mortgage  or  deed  of  trust  on  such  real  estate,  nor  from 
accepting  a  second  lien  on  real  estate  to  secure  the  repayment  of  a 
debt  previously  contracted  in  good  faith;  nor  shall  it  prevent 
subsequent  liens  of  any  kind  from  being  taken  to  secure  the  payment 
of  a  debt  previously  contracted  in  good  faith  when,  in  the  judgment 
of  the  directors  of  such  bank,  such  subsequent  liens  are  necessary 
further  to  secure  the  payment  of  any  debts  and  save  such  bank  from 
loss. 

Sec.  48.     Any  national  bank  in  this  state  receiving  the  deposits  Examinations  of 
of  any  bank  organized  and  conducting  business  under  this  act,  must  Motional  banks 
at  the  request  of  the  superintendent  of  banks,  submit  to  an  exami-  r^ceiVinS  deposits 
nation  by  him,  or  his  duly  appointed  examiners,  should  the  superin-  °*  ^""e  banks. 
tendent  of  banks  in  his  discretion   deem   it   necessary  or  desirable 
that  such  examination  be  made;  and  the  expense  of  such  examina- 
tion shall  be  paid  by  such  national  bank;  and  if  any  such  national 
bank  shall  refuse  to  permit  such  examination  to  be  made  by,   or 
under  the  direction  of  the  superintendent  of  banks,  then  the  superin- 
tendent of  banks  shall  notify  in  writing  every  bank  depositing  its 
funds  with  such  national  bank,  to  withdraw  its  deposits  therefrom, 
and  all  such  banks  shall  comply  with  such  order. 

Sec.    49.      It   shall   not  be   lawful   for   any   commercial   bank,  Only  "Savings" 
individual,    trust    company,    association,    firm,    stock    company,    co-  Banks    may 
partnership   or  corporation   to  advertise  or  put  forth  a   sign  as   a  s0',c" or  receive 
savings  bank,  either  directly  or  indirectly  or  in  any  way  to  solicit  saVln8s  deposits. 
or  receive  deposits  or  to  transact  business  in  the  way  or  manner  of 
a  savings  bank,  or  advertise  that  he  or  it  is  receiving  or  accepting 
savings,  or  in  any  way  which  might  lead  the  public  to  believe  that 
such  deposits   are  received  or  invested   under  the   same   conditions 
or  in  the  same  manner  as  deposits  in  savings  banks,  except  in  the 


40 N.    W.    HALSEY    &   CO. 

case  of  savings  banks  or  banks  having  savings  departments,  subject 
to  the  provisions  of  this  act.  Any  commercial  bank,  individual, 
trust  company,  association,  firm,  stock  company,  copartnership  or 
corporation,  violating  any  provision  of  this  section  shall  forfeit  to 
this  state  one  hundred  dollars  a  day  for  every  day  during  which 
such  violation  continues. 

Posting  of       Sec.   50.     Every  bank  shall  post  in  a  conspicuous  place  in  its 
certificate,  banking  room  or  branch  office  the  last  certificate  obtained  from  the 

superintendent  of  banks  under  the  provisions  of  either  section  nine 

or  one  hundred  twenty-seven  of  this  act. 

Deposits  fep  Sec.  5 1 .  Any  court  having  appointed  and  having  jurisdiction 
court  officers  of  any  executor,  administrator,  guardian,  assignee,  receiver,  deposi- 
or  trustees,  tary  or  trustee,  upon  the  application  of  such  executor,  administrator, 
guardian,  assignee,  receiver,  depositary  or  trustee,  or  upon  the 
application  of  any  person  having  an  interest  in  the  estate  administered 
upon  by  such  officer  or  trustee,  after  notice  to  other  parties  in  interest 
as  the  court  may  direct,  and  after  a  hearing  upon  such  application, 
may  authorize  such  officer  or  trustee  to  deposit  any  money  then  in 
his  hands  as  such  officer  or  trustee  or  which  may  thereafter  come 
into  his  hands,  and  until  the  further  order  of  the  court,  in  any  bank 
organized  under  the  laws  of  the  State  of  California;  and  upon  such 
deposit  being  made,  the  officer  or  trustee  so  depositing  the  same  shall 
thereafter  and  while  such  moneys  remain  on  deposit  in  such  bank, 
be  relieved  and  discharged  from  all  liability  and  responsibility 
therefor,  and  the  bond  required  of  such  officer  or  trustee  given  upon 
his  appointment  shall  be  thereupon  by  said  court  reduced  to  such  an 
amount  as  the  court  may  deem  reasonable;  such  deposit  shall  be 
repaid  only  upon  the  orders  of  said  court,  and  shall  be  a  preferred 
claim  against  such  bank  and  be  paid  in  full  before  any  other 
depositor  of  such  bank  shall  have  been  paid. 

Certified        Sec.  52.     Whenever  a  check  drawn  on  any  bank  is  certified  by 
checks,   any  officer  or  employee  of  such  bank,  the  amount  thereof  shall  be 
immediately    charged    against   the    account   of   the   person,    firm   or 
corporation  drawing  the  same. 

It  shall  be  unlawful  for  any  officer  or  employee  of  any  bank  to 
certify  any  check  drawn  upon  such  bank  unless  the  person,  firm  or 


BANK   ACT   OF   CALIFORNIA 41^ 

corporation  drawing  the  check  has  on  deposit  with  the  bank  at  the 
time  such  check  is  certified,  an  amount  of  money  subject  to  the 
payment  of  such  check,  equal  to  the  amount  specified  in  such  check. 

Any  officer  or  employee  of  any  bank  who  shall  wilfully  violate 
the  provisions  of  this  section,  or  shall  resort  to  any  device,  or  receive 
any  fictitious  obligations,  directly  or  indirectly,  in  order  to  evade 
the  provisions  hereof,  or  who  shall  certify  checks  before  the  amount 
thereof  shall  have  been  regularly  entered  to  the  credit  of  the  drawer, 
shall  be  guilty  of  a  felony. 

Sec.  53.     The  capital  stock  of  any  bank  having  a  capital  stock   Certificates  of 
shall  have  a  par  value  of  at  least  one  hundred  dollars  and  the  paid-   caP'"»  siocl?. 
up  value  shall  be  endorsed  on  the  face  of  each  certificate  issued, 
which  paid-up  value  shall  be  the  same  on  all  certificates  issued.     No 
bank  shall  have  preferred  stock. 

Sec.  54.  All  real  estate  purchased  by  any  bank  at  sales  under  Real  estate 
pledges,  mortgages  or  deeds  of  trust  for  its  benefit  for  money  loaned  purchased  fej) 
and  such  as  may  be  conveyed  to  it  by  borrowers  in  satisfaction  and  bank  at 
discharge  of  loans  made  thereon  and  all  other  real  estate  owned  or  foreclosure. 
held  by  it,  which  is  not  necessary  for  carrying  on  its  business,  must 
be  sold  by  such  bank  within  five  years  after  title  thereto  shall  have 
vested  in  it  by  purchase  or  otherwise.  Parcels  of  such  real  estate 
not  sold  within  said  time  may  be  purchased  by  any  person  wanting 
the  same  upon  the  conditions  and  proceedings  following:  The 
intending  purchaser  may  file  a  petition  in  the  superior  court  in  and 
for  the  county  wherein  said  real  estate  or  any  portion  thereof  is 
situated;  upon  the  filing  of  such  petition  a  citation  shall  be  issued 
out  of  said  court  directed  to  the  bank  owning  such  real  estate 
requiring  such  bank  to  show  cause  on  a  day  certain  which  shall  be 
not  earlier  than  ten  days  after  the  service  of  such  citation,  why 
commissioners  should  not  be  appointed  by  said  court  for  the  purpose 
of  appraising  the  value  of  the  real  estate  described  in  the  petition 
and  of  selling  the  same  at  public  auction  under  the  provisions  of 
this  section.  If  there  shall  be  any  liens  or  encumbrances  of  record 
against  such  real  estate  the  person  or  persons  holding  such  liens  or 
encumbrances  shall  likewise  be  cited  and  the  court  shall  in  its  final 
decree  distribute  the  proceeds  of  such  sale,  if  a  sale  thereof  shall  be 


42  N.   W.    HALSEY   &   CO. 


made,  according  to  the  equities  of  the  parties.  If  it  shall  appear 
at  the  hearing  of  such  petition  that  the  real  estate  therein  sought  to 
be  purchased  is  held  by  such  bank  in  violation  of  the  provisions  of 
this  section  or  of  the  constitution  of  this  state,  the  court  shall 
appoint  three  commissioners  to  appraise  the  value  thereof  and  sell 
the  same  at  public  auction  at  the  county  seat  of  the  county  wherein 
Notice  of  said  real  estate  or  any  part  thereof  is  located.  Notice  of  which 
sale,  said  sale  shall  be  given  to  the  bank  owning  said  real  estate  and  to 
any  other  persons  interested  therein  as  shown  by  the  records  of 
such  county  at  least  ten  days  before  the  date  of  such  sale  and  shall 
be  published  once  a  week  for  three  successive  weeks  in  some  news- 
paper published  in  the  county  where  such  real  estate  or  any  part 
thereof  may  be  located  or  if  no  newspaper  shall  be  published  in 
such  county  then  in  a  newspaper  published  in  some  neighboring 
county.  Such  notice  shall  state  the  time  and  place  of  such  sale 
and  shall  describe  the  real  estate  to  be  sold  with  common  certainty 
and  state  the  value  thereof  as  fixed  by  the  appraisement  of  such 
commissioners  and  state  that  no  bid  less  than  such  appraised  value 
will  be  received  therefor.  No  sale  shall  be  made  for  an  amount 
less  than  the  appraised  value  of  such  real  estate  fixed  by  said 
commissioners  and  in  the  event  that  no  bid  is  received  at  such  sale 
at  least  equal  to  said  appraised  value  of  said  real  estate  no  intend- 
ing purchaser  can  institute  the  proceedings  provided  for  in  this 
section  within  one  year  thereafter.  In  case  of  any  sale  made 
under  the  provisions  of  this  section  and  of  the  refusal  of  any  bank 
owning  such  real  estate  or  of  any  lienholder  or  encumbrancer  to 
execute  the  conveyances  or  releases  necessary  or  proper  to  vest  the 
title  of  such  bank,  lienholder  or  encumbrancer  in  the  purchaser 
thereof  the  court  shall  have  power  in  such  proceedings  to  direct  said 
commissioners  to  execute  such  deeds,  conveyances  or  releases  upon 
the  payment  to  them  of  the  purchase  price  therefor.  The  fees  of 
such  commissioners  and  cost  of  sale  shall  be  fixed  by  the  court, 
upon  making  such  appointment  but  the  entire  expense  thereof  shall 
not  exceed  one  hundred  dollars.  The  cost  of  any  such  pro- 
ceedings shall  be  borne  by  the  intending  purchaser  if  no  sale  shall 
be  made  but  if  a  sale  shall  be  made  the  costs  of  such  pro- 
ceedings shall  be  borne  by  the  purchaser  of  the  property  and  the 
person   who   filed   the   petition   and    advanced   the   costs   of    such 


BANK   ACT   OF   CALIFORNIA  43 

proceedings  shall  be  reimbursed  in  case  he  shall  not  become  such 
purchaser.  All  sales  hereunder  shall  be  returned  to  the  court 
having  jurisdiction  of  the  matter  in  the  same  manner  as  in  the  case 
of  sales,  by  commissioners,  of  real  estate  on  foreclosure  of  mortgages. 
Nothing  in  this  section  contained  shall  be  deemed  to  affect  the 
power  of  the  superintendent  of  banks  to  require  the  writing  down 
of  the  value  of  real  estate  held  by  any  bank,  at  any  time,  when 
such  writing  down  shall  be  proper. 

Sec.    55.     Receiving    deposits,    issuing    certificates    of    deposit,  Certificates  of 
checks  and  bills  of  exchange,  and  the  like,  in  the  transaction  of  the  deposit,  checks, 
ordinary   business  of   a   bank,   must   not   be   construed   to  be   the  bills  of 
creation  of  debt  within  the  meaning  of  the  phrase  "create  debt"  in  exchange,  etc. 
section  three  hundred  nine  of  the  Civil  Code,  nor  of  indebtedness 
within   the   meaning   of   the   phrase   "the   capital   stock   cannot   be 
diminished  to  an  amount  less  than  the  indebtedness  of  the  corpora- 
tion" in  section  three  hundred  fifty-nine  of  the  Civil  Code,  except 
that  no  bank  shall  reduce  its  capital  stock  to  an  amount  less  than 
is  required  by  this  act  to  be  maintained  by  such  bank,  or  less  than 
any  indebtedness  of  such  bank  other  than  such  deposits. 

The  terms  "real  estate,"  or  "real  property,"  or  "personal 
property,"  when  used  in  this  act  shall  have  the  meaning  defined 
in,  and  shall  be  construed  in  accordance  with  the  provisions  of 
Title  I  of  Part  I  of  Division  Second  of  the  Civil  Code. 

Sec.    56.      Any  bank  organized   and   existing   under   the   laws  "National 
of    this    state    is    hereby    authorized    and    empowered    to    join    or  Reserve 
associate    itself   with    any    "National    Reserve    Association    of    the  Association 
United  States"   or  branch   thereof,   or  any  plan  now   or  hereafter  of  the  U.  S." 
created   or  established  by   act  of   Congress  whether  such   banking 
or  currency  association  or  plan  be  created  by  Congress  under  the 
above  or  any  other  name.     Nothing  in  this  act  shall  prohibit  any 
such  bank  from  joining  or  associating  itself  with  any  such  association 
or  plan  or  branch  thereof  nor  from  investing  any  part  of  its  capital 
or  surplus  in  the  stock  of  such  association,  plan  or  branch  thereof 
in  accordance  with  the  terms  and  provisions  of  such  act  of  Congress; 
provided,  however,  that  such  investment  shall  in  no  case  exceed  the 
minimum    amount    required    to   join    or    associate    itself    with    such 


44  N.    W.    HALSEY   &   CO. 


association,  plan  or  branch  thereof.  Any  bank  joining  or  associating 
itself  with  such  association,  plan  or  branch  thereof,  shall  be 
permitted  to  conform  to  and  transact  its  business  in  accordance  with 
the  terms  and  provisions  of  such  act  of  Congress  creating  the  same 
and  the  rules  and  regulations  of  such  association,  plan  or  branch 
thereof,  anything  in  this  act  to  the  contrary  notwithstanding. 

Article  II. 

SAVINGS    BANKS. 

Capital       Sec.    60.     Every  savings  bank  hereafter  organized  must  have 
siocf(.  p^d  Up  m  casft  a  capital  stock  of  not  less  than 

(a)  Twenty-five  thousand  dollars  if  its  principal  place  of  business 
is  located  in  any  locality  the  population  of  which  does  not  exceed 
five  thousand  persons; 

(b)  Fifty  thousand  dollars  if  its  principal  place  of  business  is 
located  in  any  city  the  population  of  which  is  more  than  five 
thousand  persons,  but  does  not  exceed  twenty-five  thousand  persons; 

(c)  One  hundred  thousand  dollars  if  its  principal  place  of 
business  is  located  in  any  city  the  population  of  which  is  more  than 
twenty-five  thousand  persons  but  does  not  exceed  one  hundred 
thousand  persons; 

(J)  Two  hundred  thousand  dollars  if  its  principal  place  of 
business  is  located  in  any  city  the  population  of  which  is  more  than 
one  hundred  thousand  persons  but  does  not  exceed  two  hundred 
thousand  persons; 

(e)  Three  hundred  thousand  dollars  if  its  principal  place  of 
business  is  located  in  any  city  the  population  of  which  is  more  than 
two  hundred  thousand  persons. 

Excepting  that  any  savings  bank  organized  without  capital  stock 
must  have  a  reserve  fund  of  at  least  one  million  dollars.  Until 
the  capital  stock  or  reserve  fund  hereinbefore  required  shall  be 
actually  paid  in,  the  superintendent  of  banks  shall  refuse  to  issue  the 
certificate  required  by  this  act.  The  foregoing  classification  shall 
not  apply  to  any  savings  bank  already  in  existence  which  has 
received  its  certificate  to  do  a  banking  business  from  the  superin- 
tendent of  banks;  nor  to  any  bank  the  location  of  which  shall 
have  been  included  by  annexation  or  consolidation  within  the  limits 


BANK   ACT   OF   CALIFORNIA 45 

of  a  city  of  a  class  requiring  a  larger  capitalization,  but  no  bank 
thus  excepted  shall  be  permitted  to  establish  any  new  branch  office 
as  provided  in  section  nine  of  this  act  or  to  remove  its  place  of 
business  from  the  original  limits  of  the  city  or  township  wherein 
it  was  located  prior  to  such  annexation  or  consolidation  until  it  shall 
have  the  capital  required  of  banks  in  such  city  not  within  said 
exception.  Such  excepted  banks  may  not  in  any  case  decrease  their 
capital  stock  but  may  increase  the  same  in  the  manner  provided  by 
law  to  an  amount  either  greater  or  less  than  that  required  of  banks 
in  such  city  not  within  said  exception;  provided,  that  nothing  herein 
shall  be  construed  to  affect  the  provisions  of  section  nineteen  of  this 
act  relative  to  the  proportion  of  capital  and  surplus  to  deposits  or 
of  section  twenty-three  of  this  act  relative  to  the  capital  stock 
required  of  banks  doing  a  departmental  business.  The  provisions 
of  section  twenty-three  of  this  act,  as  to  population,  shall  apply  to 
any  bank  organized  under  the  provisions  of  this  section. 

Sec.   61.     Any  savings  bank  may  purchase,  hold  and   convey  Real  and 
real  or  personal  property  as  follows:  personal 

1 .  The  lot  and  building  in  which  the  business  of  the  bank  is  property  which 
carried  on;     furniture  and   fixtures,  vaults   and  safe   deposit  vaults  ^al?  he 

and  boxes  necessary   or  proper   to   carry  on   its   banking   business;   purchased,  held 

such  lot  and  building,  furniture  and  fixtures,  vaults  and  safe  deposit   or  convened. 

vaults   and   boxes   shall   not,   in   the   aggregate,    be   carried   on   the 

books  of  such  bank  as  an  asset  to  an  amount  exceeding  its  paid-up   £0/  anj 

capital  and  surplus;    and  hereafter,   the  authority  of  a  two-thirds   building. 

vote  of   all   of   the   directors   shall   be   necessary   to    authorize   the 

purchase   of   such   lot   and   building,    or   the   construction    of   such 

building. 

2.  Such  as  may  have  been  mortgaged,  pledged  or  conveyed  to  Purchased  under 
it  in  trust  for  its  benefit  in  good  faith,  for  money  loaned  in  pursuance   pledges. 

of  the  regular  business  of  the  corporation. 

3.  Such  as  may  have  been  purchased  at  any  sales  under  pledge,    Restrictions. 
mortgage  or  deed  of  trust  made  for  its  benefit  for  money  so  loaned 

and  such  as  may  be  conveyed  to  it  by  borrowers  in  satisfaction 
and  discharge  of  loans  made  thereon.  No  savings  bank  shall 
purchase,  own,  or  sell  personal  property,  except  such  as  may  be 
requisite    for    its    immediate    accommodation    for    the    convenient 


46 N.    W.    HALSEY   &   CO. 

transaction  of  its  business,  notes  or  bonds  secured  by  trust  deeds  or 
mortgages  on  real  estate,  bonds,  securities  or  evidences  of  indebted- 
ness, public  or  private,  gold  or  silver  bullion  and  United  States 
mint  certificates  of  ascertained  value,  and  evidences  of  debt  issued 
by  the  United  States.  No  savings  bank  shall  purchase,  own,  hold 
or  convey  bonds,  securities  or  evidences  of  indebtedness,  public  or 
private,  except  as  follows: 

U.  o.  Bonds.  (a)  Bonds  or  interest-bearing  notes  or  obligations  of  the 
United  States,  or  those  for  which  the  faith  and  credit  of 
the  United  States  are  pledged  for  the  payment  of  principal 
and  interest; 

State  of      (b)  Bonds  of  this  state,  or  those  for  which  the  faith  and 
California  Bonds,  credit  of  the  State  of  California  are  pledged  for  the  pay- 
ment of  principal  and  interest; 

State  Bonds.  (c)  Bonds  of  any  state  in  the  United  States  that  has 
not,  within  five  years  previous  to  making  such  investment 
by  such  bank,  defaulted  in  the  payment  of  any  part  of 
either  principal  or  interest; 

County,  city  and  (d)  Bonds  of  any  county,  city  and  county,  city  or  school 
county,  and  district  of  this  state ;  bonds  of  any  permanent  road  division 
school  districts  in  any  county  issued  in  pursuance  of  the  provisions  of 
of  California,  article  IX,  chapter  II,  title  VI,  part  III  of  the  Political 
Code;  bonds  of  any  sewer  district,  drainage  district, 
reclamation  district,  protection  district,  or  sanitary  district 
organized  under  the  laws  of  this  state;  and  any  irrigation 
district  bonds  which  the  law  may  now  or  hereafter 
authorize  to  be  used  as  security  for  the  deposit  of  public 
moneys;  provided,  that  the  total  amount  of  bonds  so  issued 
by  any  such  sewer  district,  drainage  district,  protection 
district,  or  sanitary  district,  does  not  exceed  fifteen  per 
centum  of  the  value  of  the  taxable  property  in  said  district 
as  shown  by  the  last  equalized  assessment  roll  of  the 
county  in  which  said  district  is  located;  and  provided, 
further,  that  the  total  amount  of  bonds  issued  by  any  such 
irrigation  district  does  not  exceed  sixty  per  centum  of  the 
aggregate  market  value  of  the  lands  within  such  district, 
and  of  the  water,  water  rights,  canals,  reservoirs,  reservoir 


BANK   ACT   OF   CALIFORNIA  47 

sites  and  irrigation  works  owned  or  to  be  acquired  or 
constructed  with  the  proceeds  of  any  of  such  bonds,  by 
said  district,  such  facts  in  reference  to  bonds  of  irrigation 
districts  to  be  determined  by  a  commission  now  or  here- 
after authorized  by  law  to  ascertain  and  report  upon  such 
facts. 

(e)  Bonds  of  any  county,  city  and  county,  city  or  town,  County,  city  and 
in  any  state  of  the  United  States  other  than  the  State  of  county,  city  or 
California,  issued  under  authority  of  any  law  of  such  state,  town  in  any  state 
which  county,  city  and  county,  city  or  town,  had,  as  shown  of  the  U.  S. 

by  the  federal  or  state  census  next  preceding  such  invest-  other  than 
ment,  a  population  of  more  than  twenty  thousand  inhab-  California. 
itants;  provided,  however,  that  the  entire  bonded  indebted- 
ness of  such  county,  city  and  county,  city  or  town, 
including  such  issue  of  bonds  does  not  exceed  fifteen  per 
centum  of  the  value  of  the  taxable  property  therein  as 
shown  by  its  last  equalized  assessment  roll,  and  provided, 
further,  that  such  county,  city  and  county,  city  or  town,  or 
the  state  in  which  it  is  located  has  not  defaulted  in  pay- 
ment of  either  principal  or  interest  due  upon  any  legally 
authorized  bond  issue  within  five  years  next  preceding  such 
investment. 

(f)  (1)  Bonds  of  any  railroad  corporation  incorporated  Bonds  of  R.  R.'s 
under  the  laws  of  the  State  of  California  and  operating  operating 
exclusively  therein,  provided  said  corporation  has  had,  for  exclusively  in 

its  fiscal  year  next  preceding  such  investment,  net  earnings,  California. 
after    payment    of    all    maintenance    charges,    operating 
expenses  and  taxes  sufficient  to  pay  the  interest  on  all  of 
its  outstanding  mortgage  indebtedness;    or 

(2)  Bonds  of  any  railroad  corporation  incorporated  under  Bonds  of  R.  R.'s 
the  laws  of  any  other  state  in  the  United  States,  operating  operating  in 
at    least    five    hundred    miles    of    standard    gauge    track  other  states. 
exclusive  of  sidings;   provided,  said  corporation  has  had  for 
its    fiscal    year    next    preceding    such     investment,     net 
earnings,  after  the  payment  of  all  maintenance   charges, 
operating  expenses  and  taxes,  amounting  to  at  least  one 
and   one   half   times    the   interest   on   all   its   outstanding 
mortgage  indebtedness;    or 


48  N.   W.    HALSEY   &   CO. 

(3)  Bonds  of  any  railroad  corporation,  the  payment  of 
which  has  been  guaranteed,  both  as  to  principal  and 
interest,  by  a  railroad  corporation  meeting  the  require- 
ments of  either  subdivision  (1)  or  (2)  of  paragraph  (f)  of 
this  section;  the  income  of  which  latter  corporation, 
together  with  the  income  of  any  corporation  whose  bonds 
it  has  guaranteed,  shall  have  been  sufficient  to  pay  all  its 
maintenance  charges,  operating  expenses,  taxes  and 
interest  on  all  its  outstanding  mortgage  indebtedness  and, 
in  addition  thereto,  interest  on  the  total  outstanding 
mortgage  indebtedness  of  any  other  corporation  the 
payment  of  which  it  has  guaranteed,  for  the  periods 
specified  in  the  respective  subdivisions  of  this  paragraph 
relating  thereto;  provided,  that  the  excess  of  income  of  any 
corporation  whose  bonds  have  been  so  guaranteed,  over 
its  maintenance  charges,  operating  expenses,  taxes  and 
interest  on  its  outstanding  mortgage  indebtedness,  shall 
not  apply  to  or  be  included  in  determining  the  income  so 
required.  In  determining  the  income  of  any  corporation 
specified  in  paragraph  (f)  of  subdivision  three  of  this 
section,  there  shall  be  included  the  income  of  any  corpora- 
tion or  corporations  out  of  which  it  shall  have  been  formed 
through  consolidation  or  merger,  and  of  any  corporation 
or  corporations,  the  entire  business  and  income  producing 
property  of  which  the  corporation  issuing  such  bonds  has 
wholly  acquired.  All  bonds  authorized  for  investment  by 
paragraph  (f)  of  subdivision  three  of  this  section  must 
be  secured  by  a  mortgage  or  trust  deed  which  is  at  the 
time  of  making  such  investment  either  a  first  mortgage  or 
deed  of  trust,  a  refunding  mortgage  or  deed  of  trust 
providing  for  the  retirement  of  all  prior  lien  mortgage 
debts  of  said  corporation,  or  an  underlying  or  divisional 
closed  mortgage  or  trust  deed  of  property  which  forms  a 
part  of  the  operating  system  of  the  corporation  then 
owning  said  property.  No  savings  bank  shall  purchase 
the  bonds  of  any  railroad  corporation  deriving  less  than 
twenty  per  centum  of  its  gross  receipts  from  passenger 
revenues.    The  term  "railroad  corporation,"  when  used  in 


BANK   ACT   OF   CALIFORNIA  49 

paragraph  (f)  of  subdivision  three  of  this  section,  shall 
have  the  meaning  defined  in  the  "Public  Utilities  Act" 
approved  December  23,  1911. 

(g)  Bonds  of  any  street  railroad  corporation ;    or  of  any  Public  service 
gas;    water;    pipe  line;    light;    power;    light  and  power;  corporation 
gas,  light  and  power;   electrical;   telephone;   telegraph;   or  and  industrial 
telephone    and    telegraph    corporation    or    of    any    other  bonds. 
"public  utility"  incorporated  under  the  laws  of  the  State 
of  California;    and 

(1)  Operating    exclusively   in   the    State    of    California;  Corporations 
provided,  said  corporation  has  had,  for  its  fiscal  year  next  operating 
preceding  such  investment,  net  earnings,  after  the  payment  exclusively  in 
of  all  maintenance  charges,  operating  expenses  and  taxes,  California. 
amounting  to  one  and  one-half  times  the  interest  on  all 

its  outstanding  mortgage  indebtedness;    or 

(2)  Operating  its  property  in  part  within  the  State  of  Corporations 
California;    provided,  said  corporation  has  had,  for  each  of  operating  partly 
its  two  fiscal  years  next  preceding  such  investment,  net  in  California. 
earnings,  after  the  payment  of  all  maintenance   charges, 

operating  expenses  and  taxes,  amounting  to  one  and  one- 
half  times  the  interest  on  all  of  its  outstanding  mortgage 
indebtedness ;    or 

(3)  The   payment  of  which  is   guaranteed,  both  as  to  Public  service 
principal    and    interest,    by    a    public    utility    corporation  corporation 
meeting  the  requirements  of  either  subdivision  (1)  or  (2)   whose  principal 
of  paragraph  (g)  of  this  section,  the  income  of  which  latter  and  interest  are 
corporation,  together  with  the  income  of  any  corporation  guaranteed  by 
whose  bonds  it  has  guaranteed,  shall  have  been  sufficient  another 

to  pay  all  its  maintenance  charges,  operating  expenses,  corporation. 
taxes  and  interest  on  all  its  total  outstanding  mortgage 
indebtedness,  and  in  addition  thereto,  interest  on  the  total 
outstanding  mortgage  indebtedness  of  any  other  corpora- 
tion the  payment  of  which  it  has  guaranteed,  for  the  period 
specified  in  the  respective  subdivisions  of  this  paragraph 
relating  thereto;  provided,  that  the  excess  of  income  of  any 
corporation  whose  bonds  have  been  so  guaranteed,  over 
its  maintenance  charges,  operating  expenses,  taxes  and 
interest  on  its  outstanding  mortgage  indebtedness  shall  not 


50 N.    W.    HALSEY   &   CO. 

apply  to  or  be  included  in  determining  the  income  so 
required.  In  determining  the  income  of  any  corporation 
specified  in  paragraph  (g)  of  subdivision  three  of  this 
section,  there  shall  be  included  the  income  of  any  corpora- 
tion or  corporations  out  of  which  it  shall  have  been  formed 
through  consolidation  or  merger,  and  of  any  corporation 
the  entire  business  and  income  producing  property  of 
which  the  corporation  issuing  such  bonds  has  wholly 
acquired.  All  bonds  authorized  for  investment  by  para- 
graph (g)  of  subdivision  three  of  this  section  must  be 
secured  by  a  mortgage  or  trust  deed  which  is  at  the  time 
of  making  such  investment;    either 

A  closed  first      I.     A  closed  first  mortgage  or  deed  of  trust ;    or 
mortgage. 

II.  A  first  mortgage  or  deed  of  trust  containing  pro- 
visions restricting  the  issuance  of  further  bonds  until  such 
time  as  the  income  of  said  corporation  shall  have  been  at 
least  sufficient,  during  the  twelve  months  next  preceding 
the  issuance  of  any  additional  bonds,  to  pay  all  maintenance 
charges,  operating  expenses,  taxes  and  one  and  one-half 
times  the  interest  on  all  its  mortgage  indebtedness  then 
outstanding  and  on  the  additional  bonds  then  proposed  to 
be  issued;    or 

A  refunding  HI*  A  refunding  mortgage  or  deed  of  trust  providing 
mortgage.  f°r  the  retirement  of  all  prior  lien  mortgage  debts  of  said 
corporation,  and  restricting  the  issuance  of  further  bonds 
until  such  time  as  the  income  of  said  corporation  shall  have 
been  at  least  sufficient,  during  the  twelve  months  next 
preceding  the  issuance  of  any  additional  bonds,  to  pay  all 
maintenance  charges,  operating  expenses,  taxes  and  one 
and  one-half  times  the  interest  on  all  its  mortgage  indebt- 
edness then  outstanding,  and  on  the  additional  bonds  then 
proposed  to  be  issued;    or 

Underlying       IV.     An   underlying   or   divisional   closed    mortgage    or 

or  divisional   trust  deed  of  property  which  forms  a  part  of  the  operating 

closed  mortgage   system  of  the  corporation  then  owning  said  property.     In 

or  trust  deed,    the  case  of  bonds  secured  by  an  underlying  or  divisional 

closed  mortgage  or  trust  deed,  the  net  income  required  by 


BANK   ACT   OF   CALIFORNIA 51 

this  section  shall  be  based  exclusively  upon  the  income, 
maintenance  charges,  operating  expenses,  taxes  and 
mortgage  indebtedness  of  or  against  the  property  covered 
by  such  underlying  or  divisional  closed  mortgage  or  trust 
deed,  or  on  the  proper  proportionate  share  of  such  property 
in  the  general  income,  maintenance  charges,  operating 
expenses,  taxes  and  mortgage  indebtedness  of  the  cor- 
poration then  owning  such  property;  provided,  however, 
that  if  the  payment  of  the  bonds  secured  by  such  under- 
lying or  divisional  closed  mortgage  or  trust  deed  shall  be 
guaranteed  or  assumed  by  the  corporation  then  owning  the 
property  securing  the  same,  such  bonds  shall  be  legal 
investments  for  savings  banks,  if  the  net  income  of  such 
corporation  from  all  sources  after  paying  all  of  its 
maintenance  charges,  operating  expenses,  taxes  and  mort- 
gage indebtedness  shall  equal  the  amount  herein  required, 
notwithstanding  any  insufficiency  of  the  income  derived 
from  the  property  covered  by  such  underlying  or  divisional 
closed  mortgage  or  trust  deed  to  meet  the  requirements  of 
this  section. 

The  term  "street  railroad  corporation,"  "pipe  line  cor- 
poration," "gas  corporation,"  "electrical  corporation," 
"telephone  corporation,"  "telegraph  corporation,"  "water 
corporation,"  and  "public  utility,"  when  used  in  paragraph 
(g)  of  subdivision  three  of  this  section,  shall  each  have  the 
meaning  defined  in  the  "Public  Utilities  Act"  approved 
December  23,  1911. 

(h)  Notes  or  bonds  secured  by  first  mortgage  or  deed  Secured  notes 
of  trust  or  other  first  lien  upon  real  estate,  improved  or  or  bonds. 
unimproved;  provided,  that  the  entire  note  or  bond  issue 
shall  not  exceed  sixty  per  centum  of  the  market  value  of 
such  real  estate,  or  such  real  estate  with  improvements, 
taken  as  security ;  and  provided,  further,  in  case  the  said  note 
or  bond  issue  is  created  for  a  building  loan  on  real  estate, 
that  at  no  time  shall  the  entire  outstanding  note  or  bond 
issue  exceed  sixty  per  centum  of  the  market  value  of  the 
real  estate  and  the  actual  cost  of  the  improvements  thereon 
taken  as  security. 


52        N.    W.    HALSEY    &   CO. 

Collateral  trust      (i)  Collateral   trust   bonds   or   notes   when   secured   by 
bonds  or  notes,  either: 

(1)  Deposit  of  bonds  authorized  for  investment  by  this 
section,  of  a  market  value  at  least  fifteen  per  centum  in 
excess  of  the  par  value  of  the  collateral  trust  bonds  or 
notes  issued;   or 

(2)  Deposit  of  bonds  authorized  for  investment  by  this 
section,  and  other  securities,  of  a  combined  market  value 
at  least  twenty  per  centum  in  excess  of  the  par  value  of 
the  collateral  trust  bonds  or  notes  issued;  provided,  that 
the  par  value  of  said  collateral  trust  bonds  or  notes  shall 
in  no  case  exceed  the  market  value  of  that  portion  of  the 
security  represented  by  bonds  authorized  for  investment 
by  this  section. 

Bonds  legal  in  (j)  Bonds  legal  for  investment  by  savings  banks  in  the 
New  York  or  states  of  New  York  or   Massachusetts ;    provided,  however, 

Massachusetts,  that  as  to  bonds  of  the  character  specified  in  paragraph 
(c)  or  (e)  of  subdivision  three  of  this  section,  such  bonds 
shall  also  conform  to  the  requirements  of  either  of  such 
paragraphs. 

(k)  Certificates  issued  by  a  corporation  organized  under 
the  laws  of  this  state  with  a  paid-up  capital  stock  of  not 
less  than  one  hundred  thousand  dollars,  evidencing  and 
conferring  participation  to  an  indicated  amount  in  a  first 
mortgage  on  real  estate  and  the  debt  secured  thereby,  and 
guaranteeing  the  payment  of  the  principal  of  the  mortgage 
debt  at  its  maturity  or  within  some  specified  time  there- 
after and  agreeing  to  pay  interest  on  the  amount  of  the 
participation  at  some  specified  rate,  the  mortgage  however 
and  debt  thereby  secured  to  be  assigned  to  a  trust 
company  and  held  by  it  as  security  for  the  payment  of 
said  mortgage  certificates  and  for  the  performance  of  all 
conditions  imposed  thereby  upon  the  corporation  issuing 
the  same,  provided  the  said  first  mortgage  indebtedness 
shall  not  exceed  sixty  per  centum  of  the  market  value  of 
the  real  estate  taken  as  security  and  provided  further  that 
the  trust  company  shall  certify  on  each  certificate  that  the 


BANK   ACT    OF   CALIFORNIA  53 


aggregate  amount  of  the  certificates  issued  evidencing  and 
conferring  participation  in  any  one  such  mortgage  and 
mortgage  debt  does  not  exceed  the  principal  of  the  said 
mortgage  debt;  but  provided,  nevertheless,  that,  unless 
such  certificates  are  made  legal  investment  for  savings 
banks  by  other  law  of  this  state,  no  savings  bank  shall 
purchase  any  such  certificates  until  the  corporation  issuing 
the  same  has  first  obtained  the  written  approval  of  the 
superintendent  of  banks  to  such  certificates  as  an 
investment  for  savings  banks.  The  actual  expense  of 
investigating  any  issue  of  such  certificates  presented  to  the 
superintendent  of  banks  for  approval  shall  be  paid  by  the 
corporation  presenting  the  same,  and  the  superintendent 
of  banks,  before  making  such  investigation  may  require  a 
cash  deposit  of  such  amount  as  he  may  deem  necessary  to 
cover  such  expense.  The  superintendent  of  banks  may 
accept  and  act  upon  the  opinions  and  appraisements  of 
any  title  insurance  or  abstract  company,  attorneys  or 
appraisers  which  may  be  presented  by  such  corporation  so 
applying,  and  the  reports  of  any  of  the  executive  officers 
of  the  corporation  issuing  such  certificates,  on  any  question 
of  fact  concerning  or  affecting  such  certificates,  the  security 
thereof,  or  the  financial  condition  of  the  corporation  issuing 
the  same.  In  lieu  of  or  in  addition  to  such  opinions, 
appraisements  and  reports,  the  superintendent  of  banks 
may,  if  he  deems  proper,  have  any  or  all  such  matters 
passed  upon  and  certified  to  him  by  attorneys,  appraisers 
or  accountants  of  his  own  selection  at  the  expense  of  the 
applicant.  The  superintendent  of  banks  shall  keep  an 
official  list  of  all  issues  of  such  certificates  approved  by 
him. 

No  notes,  bonds,  or  other  securities,  the  payment  of 
which  is  secured  by  any  mortgage  or  deed  of  trust 
executed  after  September  1,  1913,  shall  be  deemed  to  come 
within  or  conform  to  the  requirements  of  either  of 
paragraphs  (f),  (g)  or  (i)  of  subdivision  three  of  this 
section,  unless  such  notes,  bonds  or  other  securities  shall, 
in  the  manner  provided  in  this  act,  have  been  certified  by 


54  N.    W.    HALSEY    &   CO. 

the  superintendent  of  banks,  to  come  within  and  fully 
conform  to  the  requirements  of  one  or  the  other  of  said 
paragraphs. 

The  legality  of  investments  heretofore  lawfully  made  pursuant 
to  the  provisions  of  this  section,  or  of  any  law  of  this  state,  as  it 
existed  on  and  subsequent  to  July  1 ,  1 909,  shall  not  be  affected 
by  any  amendments  to  this  section  or  this  act;  nor  shall  any  such 
amendments  require  the  changing  of  investments  once  lawfully  made 
under  this  act. 

Any  bonds  authorized  by  this  section  as  a  legal  invest- 
ment for  savings  banks  may  be  carried  on  the  books  of 
said  bank  at  their  investment  value  based  on  their  market 
value  at  the  time  they  were  originally  bought,  unless  the 
superintendent  of  banks  shall  require  any  or  all  of  the 
bonds  which  may  thereafter  have  a  market  value  less  than 
the  original  investment  value  to  be  written  down  to  such 
new  market  value  which  shall  be  done  gradually  if 
practicable  and  in  such  manner  as  he  may  determine;  or 
he  may,  by  a  plan  of  amortization  to  be  determined  by 
him,  require  such  gradual  extinction  of  premium  as  will 
bring  such  bonds  to  par  at  maturity. 

No  savings  bank  shall  hereafter  purchase  or  loan  money 
upon  any  bond,  note  or  other  evidence  of  indebtedness, 
issued  by  any  "public  utility,"  subject  to  the  jurisdiction, 
regulation  or  control  of  the  railroad  commission  of  this 
state  under  the  provisions  of  the  "Public  Utilities  Act," 
approved  December  23,  1911,  unless  each  such  bond,  note 
or  other  evidence  of  indebtedness  was  either: 

(a)  Issued  prior  to  the  taking  effect  of  the  "Public 
Utilities  Act";    or 

(b)  Issued  under  authority  of  the  railroad  commission, 
in  accordance  with  the  provisions  of  said  act;    or 

(c)  A  note  issued  for  a  period  not  exceeding  twelve 
months,  in  accordance  with  the  provisions  of  subdivision 
(b)  of  section  fifty-two  of  said  act. 


BANK   ACT   OF   CALIFORNIA 55 

No  provision  of  this  act,  and  no  act,  or  deed,  done  or 
performed  under  or  in  connection  therewith,  and  no  finding 
made  or  certificate  issued  under  any  provision  thereof, 
shall  be  held  or  construed  to  obligate  the  State  of  Cali- 
fornia to  pay,  or  be  liable  for  the  payment  of,  or  to 
guarantee  in  any  manner  whatsoever,  the  regularity  or  the 
validity  of  the  issuance  of  any  stock  or  bond  certificate,  or 
bond,  note,  or  other  evidence  of  indebtedness  certified 
under  any  provision  of  this  act,  by  the  superintendent  of 
banks,  as  being  in  conformity  with  the  requirements  of 
any  paragraph  of  subdivision  three  of  this  section. 

Sec.  6 1  a.  The  superintendent  of  banks  shall  have  power,  Powers  of 
when  any  issue  of  bonds  or  securities  is  presented  to  him  Superintendent 
for  that  purpose,  to  investigate  and  ascertain  whether  such  0f  Banks 
bonds  or  securities  come  within  and  fully  conform  to  all  regarding  bonds. 
the  requirements  of  paragraphs  (f),  (g),  (h)  or  (i)  of 
subdivision  three  of  section  sixty-one  of  this  act,  or  of 
either  of  said  paragraphs.  He  may  also  investigate  and 
ascertain  for  what  period  of  time,  and  upon  what  con- 
ditions, any  franchise  granted  to  or  held  by  any  corporation 
issuing  any  such  bonds  or  securities  will  remain  in  force. 
The  actual  expense  of  investigating  any  issue  of  bonds  or 
securities  so  presented  shall  be  paid  by  the  person  or 
corporation  presenting  the  same  for  investigation,  and  the 
superintendent  of  banks,  before  making  such  investigation 
may  require  a  cash  deposit  of  such  amount  as  he  may 
deem  necessary  to  cover  such  expense.  The  superintendent 
of  banks  may  accept  and  act  upon  the  opinions  and 
appraisements  of  any  attorneys  or  appraisers  which  may 
be  presented  by  such  person  or  corporation  so  applying, 
and  the  reports  of  any  of  the  executive  officers  of  the 
corporation  issuing  such  bonds  or  securities,  on  any 
question  of  fact  concerning  or  affecting  such  bonds  or 
securities,  the  security  thereof,  the  franchise  conditions 
herein  mentioned,  or  the  financial  condition  of  the  cor- 
poration issuing  the  same.  In  lieu  of  or  in  addition  to 
such  opinions,  appraisements  and  reports,  the  superin- 
tendent of  banks  may,  if  he  deems  proper,  have  any  or  all 


56 N.    W.    HALSEY   &   CO. 

such  matters  passed  upon  and  certified  to  him  by  attorneys, 
appraisers  or  accountants  of  his  own  selection  at  the 
expense  of  the  applicant.  If  the  superintendent  of  banks 
shall  find  from  such  investigation  that  the  bonds  or 
securities  so  presented  come  within  and  fully  conform  to 
all  the  requirements  of  any  of  said  paragraphs  of  sub- 
division three  of  section  sixty-one  of  this  act,  and  is 
satisfied  from  such  investigation  as  to  such  franchise 
conditions,  he  shall  so  certify,  otherwise  a  certificate  shall 
be  refused.  The  superintendent  of  banks  shall  keep  an 
official  list  of  all  bonds  and  securities  certified  by  him. 

Sec.  62.  No  savings  bank  shall,  directly  or  indirectly,  deal  or 
trade  in  real  or  personal  property  in  any  other  case  or  for  any  other 
purpose  than  is  authorized  by  this  act,  and  shall  not  contract  any 
debt  or  liability  for  any  purpose  whatever  other  than  for  deposits, 
except  as  in  this  section  provided. 

Deposits  may        Savings  banks  may  pay  regular  depositors,   when   requested  by 
be  paid  by  draft,    them,  by  draft  upon  deposits  to  the  credit  with  their  banks,   and 
charge  current  rate  of  exchange  for  such  drafts. 

Borrowing        No  savings  bank  shall  borrow  money,  or  pledge  or  hypothecate 

money,    any  of  its  securities,  except  to  meet  the  immediate  demands  of  its 

own  depositors,  and  then  only  in  pursuance  of  a  resolution  adopted 

by  a  vote  of  a  majority  of  its  board  of  directors,  duly  entered  upon 

their  minutes,   wherein  shall  be  recorded   the  ayes  and  nays  upon 

each  vote;    also  with  the  written  approval  of  the  superintendent  of 

banks,   and  he  shall  have  the   authority  to  fix  the  amount  to   be 

borrowed,   and   the  term   and   rate  of   interest   thereon;    provided, 

however,  that  savings  banks  may,  in  the  manner  authorized 

by  law,  and  without  the  written  approval  of  the  superin- 

State,  county   tendent  of  banks,  borrow  the  public  moneys  of  the  state, 

and  municipal    counties,  cities  and  counties,  and  towns  and  receive  such 

deposits,    public  moneys  on  deposit;  provided,  also,  that  savings  banks 

may  in  the  manner  authorized  by  law,  and  without  the 

written  approval  of  the  superintendent  of  banks,  borrow 

postal  savings  moneys  of  the  United  States,  and  receive 

such  postal  savings  moneys  on  deposit. 


BANK   ACT   OF   CALIFORNIA 57 

Sec.  63.  Savings  banks  may  issue  general  certificates  of  Certificates 
deposit,  which  are  transferable,  as  in  other  cases,  by  indorsement  °f  deposit. 
and  delivery;  may  issue,  when  requested  by  the  depositor,  special 
certificates,  acknowledging  the  deposit  by  the  person  therein  named 
of  a  specified  sum  of  money,  and  expressly  providing  on  the  face 
of  such  certificate  that  the  sum  so  deposited  and  therein  named  may 
be  transferred  only  on  the  books  of  the  bank;  payment  thereafter 
made  by  the  bank  to  the  depositor  named  in  such  certificate,  or  to 
his  assignee  named  upon  the  books  of  the  bank,  or  in  case  of  death, 
to  the  legal  representative  of  such  person,  of  the  sum  for  which 
such  special  certificate  was  issued,  shall  discharge  the  bank  from  all 
further  liability  on  account  of  the  money  so  paid. 

All  time  certificates  of  deposit,  issued  by  a  savings  bank,  shall  be  Time  certificates. 
subject  to  the  same  limitations  and  conditions  as  applied  to  other 
deposits,  and  notice  thereof  shall  be  given  by  the  words  "Subject  to 
conditions   of   agreement  with  depositors"   printed   on   the   face  of 
the  certificate  issued. 

Sec.  64.  Each  savings  bank  must  prescribe  by  its  by-  Withdrawal 
laws,  or  by  contract  with  its  depositors,  the  time  and  conditions  °f  deposits. 
on  which  repayment  is  to  be  made  to  depositors,  except  as  in  this 
act  otherwise  provided.  In  all  cases  the  by-laws  or  contracts  shall 
provide  that  notice  of  at  least  thirty  days  may,  at  the  option  of 
any  such  bank,  be  required  to  be  given  of  intention  to  withdraw 
any  deposit  or  part  thereof,  but  whenever  there  is  any  call  by 
depositors  for  repayment  of  a  greater  amount  than  the  bank  may 
have  disposable  for  that  purpose,  the  directors  or  officers  thereof 
must  not  make  any  new  loan  or  investment  of  the  funds  of  the 
depositors  or  of  earnings  thereof  until  such  excess  of  call  has  ceased. 
The  directors  of  any  such  bank  having  no  capital  stock  shall,  before 
the  declaration  of  any  dividend,  carry  at  least  one-tenth  part  of 
the  net  profits  of  such  bank,  for  the  preceding  half  year,  or  for  the 
period  covered  by  said  dividend,  to  its  reserve  fund.  Subject  to 
the  provisions  of  section  nineteen  of  this  act,  any  losses  sustained 
by  any  such  bank  may  be  charged  to  and  paid  out  of  its  reserve 
fund.  A  larger  reserve  fund  may  be  created  and  nothing  herein 
contained  shall  be  construed  as  prohibitory  thereof.  The  assets  of 
any  such  bank  are  a  security  to  its  depositors.      Any  such   bank 


58  N.    W.    HALSEY    &   CO. 


organized  without  capital  stock,  may  provide  by  its  by-laws  for 
the  disposal  of  any  amount  in  its  reserve  fund  in  excess  of  the 
amount  required  by  section  nineteen  of  this  act  and  may  also 
provide  for  final  disposal  upon  the  dissolution  of  the  bank  of  its 
reserve  fund  or  the  balance  thereof  remaining  after  payment  of  any 
losses  of  such  bank. 

No  director  or  Sec.  65.  No  loan  shall  be  made,  directly  or  indirectly,  to 
officer  may  anv  director  or  officer  of  any  savings  bank  by  such  bank  or  on 
borronf  from  tne  endorsement,  surety  or  guaranty  of  any  such  officer  or  director, 
bant?,  except  that  loans  may  be  made  to  any  corporation  in  which  any 
director  or  officer  of  such  savings  bank  may  own  or  hold  a  minority 
number  of  shares  of  stock,  upon  authorization  of  a  majority  of  all 
the  directors  of  such  savings  bank  and  the  affirmative  vote  of  all 
directors  of  such  savings  bank  present  at  the  meeting  authorizing 
such  loan;  provided,  however,  that  such  loan  shall  in  all  other 
respects  conform  to  and  comply  with  all  other  provisions  of  this  act. 
Such  interested  director  or  officer  shall  not  vote  or  participate  in 
any  manner  in  the  action  of  the  board  on  such  loan.  Such 
authorization  shall  be  entered  upon  the  records  or  minutes  of  such 
savings  bank.  The  fact  of  making  such  loan,  the  names  of  the 
directors  authorizing  such  loan,  the  corporate  name  of  the  borrower, 
the  name  of  each  director  or  officer  of  such  bank  who  is  a  member, 
stockholder,  or  director  of  the  corporation  to  which  such  loan  is 
made,  the  amount  of  such  loan,  the  rate  of  interest  thereon,  the 
time  when  the  loan  will  become  due,  the  amount,  character  and 
value  of  security  given  therefor  and  the  fact  of  payment,  when 
made,  shall  be  forthwith  reported  in  writing  by  the  cashier  or 
secretary  of  such  savings  bank  to  the  superintendent  of  banks.  A 
loan  may  be  made  to  any  agent  or  employee,  other  than  an  officer 
or  director,  of  any  savings  bank  by  such  bank  upon  authorization 
of  a  majority  of  all  the  directors  of  such  savings  bank  and  an 
affirmative  vote  of  all  directors  of  such  savings  bank  present  at  the 
meeting  authorizing  such  loan;  provided,  hotvever,  that  such  loan 
shall  in  all  respects  conform  to  and  comply  with  all  other  provisions 
of  this  act.  Such  authorization  shall  be  entered  upon  the  records  or 
minutes  of  such  savings  bank.  The  fact  of  making  such  loan,  the 
names    of    the    directors    authorizing   such    loan,    the    name   of    the 


BANK   ACT   OF   CALIFORNIA  59 

borrower,  the  nature  of  his  employment,  the  amount  of  such  loan, 
the  rate  of  interest  thereon,  the  time  when  the  loan  will  become 
due,  the  amount,  character  and  value  of  the  security  given  therefor, 
and  the  fact  of  payment,  when  made,  shall  be  forthwith  reported  in 
writing  by  the  cashier  or  secretary  of  such  savings  bank  to  the 
superintendent  of  banks.  Any  officer  or  director  of  any  savings 
bank,  who  knowingly  procures  a  loan  from  such  savings  bank, 
contrary  to  the  provisions  of  this  section,  shall  be  guilty  of  a  felony. 
In  case  of  the  neglect  or  failure  of  the  secretary  or  cashier  of  any 
such  bank,  to  report  to  the  superintendent  of  banks,  as  herein 
provided,  any  of  the  facts  so  required  to  be  reported,  the  bank  shall 
be  liable  therefor  and  shall  forfeit  to  the  people  of  the  State  of 
California  twenty-five  dollars  per  day  for  each  day,  or  part  thereof, 
during  which  such  neglect  or  failure  continues. 

Sec.  66.  No  savings  bank  shall  hereafter  make  any  loans  Limitation 
to  any  person,  firm,  co-partnership  or  corporation  to  an  amount  of  loans. 
exceeding  fifty  per  centum  of  the  actual  paid-up  capital  stock 
and  surplus  of  such  bank,  or  in  the  case  of  a  bank  organized 
without  capital  stock,  to  an  amount  exceeding  fifty  per  centum  of 
the  reserve  fund  of  such  bank;  provided,  however,  that  any  savings 
bank  having  a  paid-up  capital  and  surplus  of  less  than  fifty  thousand 
dollars,  but  not  less  than  twenty-five  thousand  dollars,  may  make 
any  such  loan  on  real  estate  security  to  an  amount  not  exceeding 
twenty-five  thousand  dollars;  and  provided  further,  that  any  savings 
bank  having  a  paid-up  capital  and  surplus  of  less  than  twenty-five 
thousand  dollars  may  make  any  such  loan  on  real  estate  security 
to  an  amount  not  exceeding  its  paid-up  capital  and  surplus,  if  each 
such  loan  in  all  other  respects  conforms  to  the  provisions  of  this 
act.  The  renewal  or  extension  of  any  loan  heretofore  legally  made 
by  any  savings  bank  shall  not  be  construed  to  be  a  "loan  hereafter 
made"  within  the  meaning  of  the  provisions  of  this  section.  The 
legality  of  investments  heretofore  lawfully  made  pursuant  to  the 
provisions  of  this  act  as  it  existed  on  and  subsequent  to  July  1, 
1909,  shall  not  be  affected  by  the  provisions  of  this  section.  For 
the  purposes  of  this  section  an  endorser  or  guarantor  shall  be 
deemed  to  be  a  borrower. 


60  N.    W.    HALSEY    &   CO. 

Loans.        Sec.    67.      1.   No   savings   bank    shall   loan   money   except   on 

adequate  security  of  real  or  personal  property,   and  no  such  loan 

shall  be  made  for  a  period  longer  than  ten  years;    provided,  that 

no  such  loan  shall  be  made  on  unsecured  notes. 

Limitation      2.  No  savings  bank  shall  invest  or  loan  more  than  five 

of  investment  per  centum  of  its  assets  on  any  one  bond  issue,  except 

in  bonds,  bonds  of  the  United  States,   of  the    State  of   California, 

bonds  for  which  the  faith  and  credit  of  the  United  States 

or  of  the  State  of  California  are  pledged,  or  bonds  of  any 

county,   city   and   county,   city  or   school   district  in   this 

state,  or  bonds  of  any  irrigation  district  such  as  are  legal 

for  investment  by  savings  banks. 

3.  No  savings  bank  shall  loan  money: 

(a)  On  bonds  of  the  character  specified  in  paragraphs 
(a),  (b),  (c),  and  (d)  of  subdivision  three  of  section  sixty- 
one  of  this  act,  unless  such  bonds  shall  have  a  market 
value  at  least  ten  per  centum  in  excess  of  the  amount 
loaned  thereon;    or, 

(b)  On  bonds  of  the  character  specified  in  paragraphs 
(e).  (f)  and  (g)  or  on  bonds  or  notes  of  the  character 
specified  in  paragraph  (i)  of  subdivision  three  of  section 
sixty-one  of  this  act,  unless  such  bonds  or  notes  shall  have 
a  market  value  at  least  fifteen  per  centum  in  excess  of  the 
amount  loaned  thereon;   or, 

(c)  On  bonds  legal  for  investment  by  savings  banks  in 
the  states  of  New  York  or  Massachusetts,  unless  such 
bonds  shall  have  a  market  value  at  least  fifteen  per  centum 
in  excess  of  the  amount  loaned  thereon;    or, 

Loans  on       (d)  On  personal  property  unless  such  personal  property 

personal  property,  shall  have  a  market  value  at  least  fifty  per  centum  in 

excess  of  the  amount  loaned  thereon;    or, 

Other  bonds       (e)  On   other   bonds,   or   on   the   capital   stock   of   any 

or  stocks,   corporation,  unless  such  bonds  or  stock  shall  have  a  market 

value  at  least  fifty  per  centum  in  excess  of  the  amount 

loaned  thereon;    provided,   however,   that  no  loan   shall   be 

made  upon  the  capital  stock  of  any  bank  unless  such  bank 

has  been  in  existence  at  least  two  years  and  has  earned 

and  paid  a  dividend  on  its  capital  stock. 


BANK   ACT   OF   CALIFORNIA 61 

4.  No  savings   bank   shall   make   any   loan   on   the   security  of  Percentage  of 
real  estate,  except  it  be  a  first  lien,  and  in  no  event  to  exceed  sixty  market  value 
per  centum  of  the  market  value  of  any  real  estate  taken  as  security  'which  may  be 
except  for  the  purpose  of  facilitating  the  sale  of  property  owned  loaned  on 

by  such  savings  bank ;   provided,  that  a  second  lien  may  be  accepted  rea'  es'Qte. 

to  secure  the  repayment  of  a  debt  previously  contracted  in  good 

faith;    and,  provided,  also,   that  any  savings  bank  holding  a  first 

mortgage  or  deed  of  trust  on  real  estate  may  take  or  purchase  and 

hold  another  and  immediately  subsequent  mortgage  or  deed  of  trust 

thereon,  but  all  such  loans  shall  not  exceed  in  the  aggregate  sixty 

per  centum  of  the  market  value  of  the  real  estate  securing  the  same; 

provided,   further,   that   a   savings   bank  may   loan   not   to   exceed 

ninety  per  centum  of  the  face  value  of  a  note  or  bond  secured  by  a 

first  mortgage  or  deed  of  trust  on  real  estate,  but  in  no  event  shall 

any  such  loan  exceed  ninety  per  centum  of  sixty  per  centum   of 

the  market  value  of  the  real  estate  covered  by  said  mortgage  or 

deed  of  trust. 

5.  No   savings  bank  shall  purchase,   invest  or  loan  its  capital,  Mining  stocks 
surplus  or  the  money  of  its  depositors,  or  any  part  of  either,  in  cannot  be 
mining  shares  or  stock.      Any  president  or  managing  officer  who  purchased  or 
knowingly  consents  to  a  violation  of  any  provision  of  this  section  accepted  as 
shall  be  guilty  of  a  felony.  collateral. 

Sec.  68.  Every  savings  bank  or  savings  department  of  a  bank,  Lawful  money) 
shall  at  all  times  maintain  a  lawful  money  reserve  equivalent  to  reserve. 
four  per  centum  of  the  aggregate  amount  of  its  deposits;  one-half 
of  such  lawful  money  reserve  shall  be  kept  on  hand  in  lawful 
money  of  the  United  States  or  gold  certificates  or  silver  certificates 
of  the  United  States,  and  one  half  may  consist  of  bonds  of  the 
United  States  or  of  lawful  money  of  the  United  States  or  gold 
certificates  or  silver  certificates  of  the  United  States,  on  hand  or  on 
deposit  subject  to  call  with  any  reserve  bank  provided  for  in  section 
twenty  of  this  act;  provided,  however,  that  no  savings  bank  or 
savings  department  shall  be  required  to  maintain  in  its  own  keeping 
a  lawful  money  reserve  in  excess  of  four  hundred  thousand  dollars, 
and  when  such  lawful  money  reserve  in  its  own  keeping  reaches 
that  amount,  the  balance  of  cash  necessary  to  make  up  the  four 
per  centum  may  be  kept  on  deposit  subject  to  call  with  any  reserve 
bank  provided  for  in  section  twenty  of  this  act.  No  new  loan  shall 
be    made    during    any    deficiency    in    the    lawful    money    reserve. 


62 N.    W.    HALSEY    &   CO. 

Deposits  with  any  commercial  bank,  or  commercial  department  of  a 
bank,  on  open  account,  to  facilitate  business  transactions,  as  provided 
in  this  section,  shall  be  permitted,  and  shall  not  be  construed  as 
loans.  Not  more  than  five  per  centum  of  the  deposits  of  any  savings 
bank  shall  be  deposited  with  any  one  bank,  except  with  the  consent 
of  the  superintendent  of  banks.  Not  more  than  fifteen  per  centum 
of  the  deposits  of  any  savings  bank  shall  be  deposited  with  all 
other  banks,  except  with  the  consent  of  the  superintendent  of  banks. 
No  savings  bank  or  savings  department  shall  receive  deposits  of 
other  banks  other  than  savings  deposits  and  such  deposits  shall  not 
be  treated  or  considered  as  a  part  of  the  lawful  money  reserve  of 
such  depositing  bank;  provided,  that  the  sum  so  deposited  shall 
not  exceed  ten  thousand  dollars. 
Funds  of  Sec.  68J/2.  Where  a  decedent,  at  the  time  of  his  or  her  death, 
a  decedent,  left  moneys  on  deposit  with  a  savings  bank,  it  shall  be  lawful  for 
any  public  administrator,  who  shall  become  the  administrator  of  the 
estate,  to  allow  such  deposit  to  remain  in  said  savings  bank,  and  also, 
it  shall  be  lawful  for  him  to  deposit  therein  to  the  account  of  said 
decedent,  any  and  all  moneys  of  said  estate  not  required  for  the 
current  expenses  of  administration.  Such  deposit,  whether  made  by 
the  decedent  or  a  public  administrator,  shall  relieve  the  public  admin- 
istrator from  depositing  the  same  with  the  county  treasurer.  Moneys 
so  deposited,  whether  by  the  decedent  or  by  a  public  administrator, 
may  be  drawn  upon  demand  without  notice,  upon  the  order  of  said 
administrator,  countersigned  by  a  judge  of  a  superior  court,  when 
required  for  the  purpose  of  administration  or  otherwise. 

Sec.  69.  Every  savings  bank,  and  the  business  of  every  savings 
department  of  every  other  bank,  must  be  conducted  under  and  in 
accordance  with  the  provisions  of  this  act. 

Article  III. 
COMMERCIAL  BANKS. 

t  Sec.   80.      No  commercial  bank  shall  make  any  loans   to  any 

Loans.  ...  ,. 

person,   firm,  copartnership  or  corporation,  to  an  amount  exceeding 

the  following  percentages  of  its  capital  stock  actually  paid  in  and 

surplus : 

Limitations,         \ .   Ten  per  centum  without  security,   except  where  such  capital 

of  loans   stock  and  surplus  is  less  than  twenty-five  thousand  dollars,  in  which 

without  security,   event  an  amount  not  to  exceed  twenty  per  centum  of  such  capital 


BANK   ACT   OF   CALIFORNIA . 63 

stock  and  surplus  may  be  loaned  without  security,  and  where  such 
capital  stock  and  surplus  is  greater  than  twenty-five  thousand  dollars 
and  does  not  exceed  fifty  thousand  dollars,  a  sum  not  exceeding 
five  thousand  dollars  may  be  loaned  without  security.  Nothing 
herein  shall  prohibit  any  commercial  bank  from  taking  or  receiving 
any  kind,  character  or  amount  of  security  whatsoever,  either  real 
or  personal,  for  the  protection  of  any  loan  made  under  the  provisions 
of  this  subdivision,  but  no  such  loan  or  any  part  thereof  shall  be 
considered  or  construed  as  a  secured  loan  unless  the  whole  thereof 
is  loaned  upon  security  worth  at  least  fifteen  per  centum  more  than 
the  amount  of  such  loan;    or, 

2.  Fifteen  per  centum,  in  addition  to  the  amount  that  may  be  Secured  loans. 
loaned  under  the  provisions  of  subdivision  one  of  this  section,  upon 

security  worth  at  least  fifteen  per  centum  more  than  the  amount 
of  such  loan  so  secured;  provided,  however,  that  a  separate  note 
or  notes  shall  be  taken  for  the  unsecured  loans  and  a  separate  note 
or  notes  shall  be  taken  for  the  secured  loans,  and  the  secured  and 
unsecured  loans  shall  not  be  combined  in  any  way  within  one  note, 
or  notes;    or, 

3.  Twenty-five  per  centum  upon  security  worth  at  least  fifteen 
per  centum  more  than  the  amount  of  its  loans  so  secured;  provided, 
however,  that  when  secured  loans  to  this  amount  or  any  amount  in 
excess  of  fifteen  per  centum  are  made,  then  no  unsecured  loans  shall 
be  permitted  in  addition  to  such  secured  loans. 

A  commercial  bank  may  buy  from,  or  discount  for,  any  person,  Discounts 
firm,  co-partnership  or  corporation,  or  loan  upon  bills  of  lading  or  HUS  0f  lading 
bills  of  exchange  drawn  in  good  faith  against  actual  existing  value  HHS  0t 
an   amount  not  exceeding   seventy-five   per   centum   of   the   paid-up  exchange,  etc. 
capital   and   surplus    of   such   bank;     and   may   also   buy    from   or 
discount  for  any  person,   firm,   co-partnership   or  corporation,   com- 
mercial   or    business    paper    actually    owned    by    the    person,    firm, 
co-partnership  or  corporation  negotiating  the  same,   an  amount  not 
exceeding  twenty-five  per  centum  of  the  paid-up  capital  and  surplus 
of   such   bank;     but   the    discount   of   bills   of    lading   or   bills    of 
exchange  drawn  in  good  faith  against  actual  existing  value,  and  the 
discount   of   commercial   or  business  paper   actually  owned   by   the 
person,    firm,    co-partnership   or    corporation    negotiating    the    same, 
shall  not  be   considered   as   money  borrowed  by   the  person,   firm, 
co-partnership  or  corporation  selling  or  discounting  the  same. 


64 N.   W.    HALSEY    &   CO. 

Sec.  81.  No  loan  shall  be  made  by  any  commercial  bank 
upon  the  securities  of  one  or  more  corporations,  the  payment  of 
which  is  undertaken,  in  whole  or  in  part,  severally,  but  not  jointly, 
by  two  or  more  individuals,  firms,  or  corporations: 

(a)  If  the  borrowers  or  underwriters  be  obligated  absolutely  or 
contingently  to  purchase  the  securities,  or  any  of  them,  collateral  to 
such  loan,  unless  the  borrowers  or  underwriters  shall  have  paid  on 
account  of  the  purchase  of  such  securities  an  amount  in  cash,  or  its 
equivalent,  equal  to  at  least  twenty-five  per  centum  of  the  several 
amounts  for  which  they  remain  obligated  in  completing  the  purchase 
of  such  securities; 

(b)  If  the  commercial  bank  making  such  loan  be  liable,  directly 
or  indirectly,  or  contingently,  for  the  repayment  of  such  loan  or  any 
part  thereof; 

(c)  If  its  term,  including  any  renewal  thereof  by  agreement, 
express  or  implied,  exceed  the  period  of  one  year; 

(J)  Or  to  an  amount  under  any  circumstances  in  excess  of 
twenty-five  per  centum  of  the  capital  and  surplus  of  the  commercial 
bank  making  such  loan. 

Capital       Sec.    82.      Every    commercial    bank    hereafter    organized    must 
required,  have  paid  up  in  cash  a  capital  stock  of  not  less  than, 

(a)  Twenty-five  thousand  dollars  if  its  principal  place  of 
business  is  located  in  any  locality  the  population  of  which  does  not 
exceed  five  thousand  persons; 

(b)  Fifty  thousand  dollars  if  its  principal  place  of  business  is 
located  in  any  city  the  population  of  which  is  more  than  five 
thousand  persons  but  does  not  exceed  twenty-five  thousand  persons; 

(c)  One  hundred  thousand  dollars  if  its  principal  place  of 
business  is  located  in  any  city  the  population  of  which  is  more  than 
twenty-five  thousand  persons  but  does  not  exceed  one  hundred 
thousand  persons; 

(J)  Two  hundred  thousand  dollars  if  its  principal  place  of 
business  is  located  in  any  city  the  population  of  which  is  more  than 
one  hundred  thousand  persons  but  does  not  exceed  two  hundred 
thousand  persons; 

(e)  Three  hundred  thousand  dollars  if  its  principal  place  of 
business  is  located  in  any  city  the  population  of  which  is  more 
than  two  hundred  thousand  persons. 


BANK   ACT   OF   CALIFORNIA 65 

The  foregoing  classification  shall  not  apply  to  any  commercial 
bank  already  in  existence  which  has  received  its  certificate  to  do  a 
banking  business  from  the  superintendent  of  banks;  nor  to  any 
bank  the  location  of  which  shall  have  been  included  by  annexation 
or  consolidation  within  the  limits  of  a  city  of  a  class  requiring  a 
larger  capitalization,  but  no  bank  thus  excepted  shall  be  permitted 
to  establish  any  new  branch  office  as  provided  in  section  nine  of 
this  act  or  to  remove  its  place  of  business  from  the  original  limits 
of  the  city  or  township  wherein  it  was  located  prior  to  such  annexa- 
tion or  consolidation  until  it  shall  have  the  capital  required  of 
banks  in  such  city  not  within  said  exception.  Such  excepted  banks 
may  not  in  any  case  decrease  their  capital  stock  but  may  increase 
the  same  in  the  manner  provided  by  law  to  an  amount  either 
greater  or  less  than  that  required  of  banks  in  such  city  not  within 
said  exception;  provided,  that  nothing  herein  shall  be  construed  to 
affect  the  provisions  of  section  nineteen  of  this  act  relative  to  the 
proportion  of  capital  and  surplus  to  deposits  or  of  section  twenty- 
three  of  this  act  relative  to  the  capital  stock  required  of  banks  doing 
a  departmental  business.  The  provisions  of  section  twenty-three  of 
this  act,  as  to  population,  shall  apply  to  any  bank  organized  under 
the  provisions  of  this  section. 

Sec.  83.  No  loan  shall  be  made,  directly  or  indirectly,  to  Loans  to 
any  officer  of  any  commercial  bank  by  such  bank,  or  on  the  endorse-  directors. 
ment,  surety,  or  guaranty  of  any  such  officer,  except  as  hereinafter 
provided  in  this  section.  Loans  to  any  director,  agent,  or  other 
employee,  or  to  any  firm,  co-partnership,  or  corporation  of  which  any 
director,  officer,  agent  or  other  employee  is  a  member,  stockholder, 
director,  agent  or  other  employee,  or  to  any  person,  firm,  co-partner- 
ship or  corporation  on  the  endorsement,  surety,  or  guaranty  of 
any  such  director  other  than  an  officer,  agent  or  other  employee, 
can  be  made  by  any  commercial  bank  only  on  authorization  of,  or 
confirmation  within  thirty  days  after  making  such  loan,  by  a 
majority  of  all  the  directors  of  such  bank  and  the  affirmative  vote 
of  all  directors  of  such  bank  present  at  the  meeting  authorizing  or 
confirming  such  loan.  Such  interested  director  shall  not  vote  or 
participate  in  any  manner  in  the  action  of  the  board  on  such  loan. 
The  board  of  directors  of  any  such  bank  may  fix  the  total  amount 
of  credit  that  may  at  any  one  time  during  the  twelve  months  next 


66  N.    W.    HALSEY    &   CO. 


succeeding  be  given  to  any  director,  agent,  or  other  employee,  or 
to  any  firm,  co-partnership  or  corporation  in  which  any  director, 
officer,  agent,  or  other  employee  is  a  member,  stockholder,  director, 
agent  or  other  employee,  and  any  or  all  loans  made  within  or  up 
to  the  total  amount  of  such  authorized  credit  may  at  any  time 
during  said  twelve  months,  be  renewed  from  time  to  time,  in  whole 
or  in  part,  by  the  officers  of  the  bank  without  any  further  vote  or 
action  on  the  part  of  the  board  of  directors.  Each  such  authoriza- 
tion shall  be  entered  upon  the  records  or  minutes  of  said  bank.  No 
director  shall  vote  or  participate  in  any  manner  in  such  action  of 
the  board  fixing  the  total  amount  of  credit  that  may  at  any  one 
time  be  given  to  himself  or  to  any  firm,  co-partnership  or  corpora- 
tion in  which  he  is  a  member,  stockholder,  director,  agent  or  other 
employee.  The  fact  of  making  such  loan,  the  names  of  the 
directors  authorizing  such  loan,  the  name  of  the  director,  agent,  or 
employee,  obtaining  such  loan,  or  the  name  of  the  firm,  co-partner- 
ship or  corporation  in  which  such  director,  officer,  agent,  or  employee 
is  interested,  obtaining  such  loan,  the  amount  of  such  loan,  the  rate 
of  interest  thereon,  the  time  when  the  loan  will  become  due,  the 
amount,  character  and  value  of  security  given  therefor,  if  any, 
and  the  fact  of  payment  when  made,  shall  be  forthwith  reported  in 
writing  by  the  cashier  or  secretary  of  such  bank  to  the  superintendent 
of  banks.  In  case  of  a  loan  so  made  without  the  previous 
authorization  of  the  directors,  the  action  of  the  board  of  directors, 
in  confirming  or  refusing  to  confirm  such  loan  within  thirty  days 
thereafter,  shall  be  reported  in  the  same  manner.  Any  officer, 
director,  agent,  or  employee  of  a  commercial  bank,  who  knowingly 
procures  a  loan  from  such  commercial  bank  contrary  to  the 
provisions  of  this  section,  shall  be  guilty  of  a  felony.  In  case  of 
the  neglect  or  failure  of  the  secretary  or  cashier  of  any  such  bank, 
to  report  to  the  superintendent  of  banks,  as  herein  provided,  any 
of  the  facts  so  required  to  be  reported,  the  bank  shall  be  liable 
therefor  and  shall  forfeit  to  the  people  of  the  State  of  California 
twenty-five  dollars  per  day  for  each  day,  or  part  thereof,  during 
which  such  neglect  or  failure  continues. 
Bank  Sec.  84.  No  commercial  bank  shall  invest  an  amount  exceed- 
premises.  ing  its  paid-up  capital  and  surplus  in  the  lot  and  building  in  which 
the  business  of  the  bank  is  carried  on,  furniture  and  fixtures,  vaults 
and  safe  deposit  vaults  and  boxes  necessary  or  proper  to  carry  on 


BANK   ACT   OF   CALIFORNIA 67 

its  banking  business;  and  hereafter  the  authority  of  a  two-thirds 
vote  of  all  the  directors  shall  be  necessary  to  authorize  the  purchase 
of  such  lot  and  building  or  the  construction  of  such  building. 

Article  IV. 

TRUST  COMPANIES. 

Sec.  90.  Any  corporation  which  has  been  or  shall  be  incor-  Capital 
porated  under  the  general  corporation  laws  of  this  state  which  is  required. 
authorized  by  its  articles  of  incorporation  to  act  as  executor, 
administrator,  guardian  of  estates,  assignee,  receiver,  depositary  or 
trustee,  under  appointment  of  any  court  or  by  authority  of  any  law 
of  this  state,  or  as  trustee  for  any  purpose  permitted  by  law,  which 
has  its  principal  place  of  business  in  a  city  in  which  the  population 
does  not  exceed  one  hundred  thousand  persons  and  which  has  a 
capital  of  not  less  than  one  hundred  thousand  dollars  actually  paid 
in,  in  cash,  assigned  to  or  available  for  the  purpose  of  conducting 
business  in  any  such  capacity,  or  trust  business  of  any  character 
permitted  by  law,  and  which  has  made  with  the  state  treasurer  the 
deposit  of  money  or  securities  of  the  character  and  in  the  amount 
required  by  the  terms  of  section  ninety-six  of  this  act,  and  which 
has  received  from  the  superintendent  of  banks  the  certificate  of 
authority  required  by  the  terms  of  section  one  hundred  and  twenty- 
seven  of  this  act,  to  transact  such  business,  and  any  corporation 
which  has  been  or  shall  be  incorporated  under  the  general  corpora- 
tion laws  of  this  state,  which  is  authorized  by  its  articles  of 
incorporation  to  act  as  executor,  administrator,  guardian  of  estates, 
assignee,  receiver,  depositary  or  trustee,  under  appointment  of  any 
court  or  by  authority  of  any  law  of  this  state,  or  as  trustee  for  any 
purpose  permitted  by  law,  which  has  its  principal  place  of  business 
in  a  city  in  which  the  population  exceeds  one  hundred  thousand 
persons  and  which  has  a  capital  of  at  least  two  hundred  thousand 
dollars  actually  paid  in,  in  cash,  assigned  to  or  available  for  the 
purpose  of  conducting  business  in  any  such  capacity,  or  trust  business 
of  any  character  permitted  by  law,  and  which  has  made  with  the 
state  treasurer  the  deposit  of  money  or  securities  of  the  character 
and  in  the  amount  required  by  the  terms  of  section  ninety-six  of 
this  act,  and  which  has  received  from  the  superintendent  of  banks 
the  certificate  of  authority  required  by  the  terms  of  section  one 
hundred  twenty-seven  of  this   act,   to   transact  such  business,   may 


68 N.    W.    HALSEY    &   CO. 

act,  or  may  be  appointed  by  any  court  to  act,  in  any  such  capacity 
in  like  manner  as  an  individual  and  when  so  qualified  shall  be 
known  as  a  trust  company.  Any  such  trust  company  may,  as 
provided  in  this  act,  accept  or  receive  any  deposit  of  money  or 
personal  property  authorized,  directed  or  permitted  to  be  made  with 
any  such  corporation  by  any  court  or  law  of  this  state,  and  may 
accept  and  execute  any  trust  provided  for  in  this  act,  or  permitted 
by  any  law  of  this  state,  to  be  taken,  accepted  or  executed  by  an 
individual.  Any  such  trust  company,  if  located  in  a  city  the 
population  of  which  does  not  exceed  one  hundred  thousand  persons 
must  segregate  that  portion  of  its  capital  and  surplus  assigned  to  or 
available  for  its  trust  business  and  must  apportion  and  set  aside  at 
least  fifty  thousand  dollars  of  such  paid-up  capital  as  security  for 
the  faithful  performance  and  execution  of  all  private  trusts  accepted 
by  it  and  must  also  apportion  and  set  aside  at  least  fifty  thousand 
dollars  of  such  paid-up  capital  as  security  for  the  faithful  perform- 
ance and  execution  of  all  court  trusts  accepted  by  it  and  whenever 
such  trust  company  shall,  under  the  provisions  of  sections  96  and 
Additional  98  of  this  act,  be  required  to  make  the  first  additional  deposit 
deposit  of  0f  securities  with  the  state  treasurer,  such  trust  company  must 
securities.  also  apportion  and  set  aside  an  additional  fifty  thousand  dollars 
of  paid-up  capital  as  security  for  the  faithful  performance  and 
execution  of  all  private  trusts  accepted  by  it  and  must  also  apportion 
and  set  aside  an  additional  fifty  thousand  dollars  of  paid-up  capital 
as  security  for  the  faithful  performance  and  execution  of  all  court 
trusts  accepted  by  it,  and  any  trust  company,  if  located  in  a  city, 
the  population  of  which  exceeds  one  hundred  thousand  persons, 
must  segregate  that  portion  of  its  capital  and  surplus  assigned  to 
or  available  for  its  trust  business  and  must  apportion  and  set  aside 
at  least  one  hundred  thousand  dollars  of  such  paid-up  capital  as 
security  for  the  faithful  performance  and  execution  of  all  private 
trusts  accepted  by  it  and  must  also  apportion  and  set  aside  at  least 
one  hundred  thousand  dollars  of  such  paid-up  capital  as  security 
for  the  faithful  performance  and  execution  of  all  court  trusts 
accepted  by  it;  provided,  that  no  such  trust  company  shall  at  any 
time  be  required  to  apportion  and  set  aside  any  portion  of  its 
surplus  as  security  for  the  faithful  performance  of  such  private 
trusts,   nor   shall   it   be  prohibited   from   so   doing;     and   provided. 


BANK   ACT   OF   CALIFORNIA  69 


further,  that  the  respective  amounts  of  capital  or  capital  and  surplus 
so  apportioned  and  set  aside  shall  be  treated  in  all  respects  as  the 
separate  capital  or  capital  and  surplus  of  each  respective  kind  or 
class  of  business,  as  though  the  same  were  conducted  by  separate 
and  distinct  corporations,  and  each  shall  be  kept,  held,  used  and 
disposed  of  wholly  for  the  exclusive  benefit,  protection  and  security 
of  the  respective  classes  of  trust  business  to  which  the  same  were 
respectively  so  apportioned  and  set  aside.  In  all  cases  in  which  it 
is  required  that  an  executor,  administrator,  guardian  of  estates, 
assignee,  receiver,  depositary  or  trustee,  shall  qualify  by  taking 
and  subscribing  an  oath,  or  in  which  an  affidavit  is  required,  it 
shall  be  a  sufficient  qualification  by  such  corporation  if  such  oath 
be  taken  and  subscribed  or  such  affidavit  made  by  the  president, 
vice  president,  secretary,  manager,  trust  officer,  assistant  trust  officer 
or  regularly  employed  attorney  thereof,  and  such  officer  or  employee 
shall  be  liable  for  the  failure  of  such  trust  company  to  perform  any 
of  the  duties  required  by  law  to  be  performed  by  an  individual 
acting  in  like  capacity  and  subject  to  like  penalties;  provided,  any 
such  appointment  as  guardian  shall  apply  to  the  estate  only,  and  not 
to  the  person.  No  foreign  corporation  shall  have  or  exercise  in 
this  state  the  power  to  act  as  trustee  under  any  mortgage,  deed  of 
trust,  or  other  instrument  securing  notes  or  bonds  issued  by  any 
corporation,  excepting  that  a  foreign  corporation  may  be  authorized 
to  act,  outside  of  the  State  of  California,  as  co-trustee  with  any 
qualified  trust  company  organized  and  doing  business  under  the 
laws  of  this  state,  for  the  following  purposes  with  reference  to 
bonds  secured  by  mortgage  or  deed  of  trust  of  property  in  this 
state,  and  none  other: 

( 1 )  To  deliver  bonds,   and  receive  payment  therefor. 

(2)  To   deliver   permanent   bonds    in    exchange    for    temporary 
bonds  of  the  same  issue. 

(3)  To   deliver   refunding   bonds   in   exchange   for   those   of   a 
prior  issue  or  issues. 

(4)  To    register   bonds,    or    to    exchange   registered   bonds    for 
coupon  bonds,  or  coupon  bonds  for  registered  bonds. 


70  N.    W.    HALSEY    &   CO. 

(5)  To  pay  interest  on  such  bonds,  and  to  take  up  and  cancel 
coupons  representing  such  interest  payments. 

(6)  To  redeem  and  cancel  bonds  when  called  for  redemption, 
or  to  pay  and  cancel  bonds  when  due. 

(7)  The   certification   of   registered   bonds    for   the   purpose   of 
exchanging  registered  bonds  for  coupon  bonds. 

Deposits  by  Sec.  9 1 .  Any  court  having  jurisdiction  of  any  executor, 
authority  of  administrator,  guardian,  assignee,  receiver,  depositary  or  trustee, 
court,  upon  the  application  of  any  such  officer  or  trustee,  or  upon  the 
application  of  any  person  having  an  interest  in  the  estate  or  property 
administered  by  such  officer  or  trustee,  after  such  notice  to  the  other 
parties  in  interest  as  the  court  may  direct,  and  after  a  hearing 
upon  such  application,  may  authorize  such  officer  or  trustee  to 
deposit  any  moneys  then  in  his  hands,  or  which  may  come  into 
his  hands  thereafter,  until  the  further  order  of  said  court,  with  any 
such  trust  company,  and  upon  deposit  of  such  money,  and  its  receipt 
and  acceptance  by  such  trust  company,  the  said  officer  or  trustee 
shall  be  discharged  from  further  care  or  responsibility  therefor. 
Such  deposit  shall  be  paid  out  only  upon  the  order  of  said  court. 

Deposits  by  Sec.  92.  Any  public  administrator  may  deposit  any  or  all 
public  moneys  of  any  estate  upon  which  he  is  administering,  not  required 
administrator,  for  the  current  expenses  of  such  administration,  with  any  such  trust 
company  having  its  principal  place  of  business  in  the  county,  or 
city  and  county  in  which  he  is  acting  as  such  administrator.  Any 
court  having  jurisdiction  of  an  estate  being  administered  by  a  public 
administrator,  may  direct  such  administrator  to  deposit  all  or  any 
part  of  the  moneys  of  said  estate  with  any  such  trust  company. 
Such  deposit  shall  relieve  the  public  administrator  from  depositing 
with  the  county  treasurer  the  moneys  so  deposited  with  such  trust 
company.  Moneys  so  deposited  by  a  public  administrator  may 
be  drawn,  upon  the  order  of  such  administrator,  countersigned  by 
a  judge  of  the  superior  court,  when  required  for  the  purposes  of 
administration,  or  otherwise. 

Deposits  by        Sec.    93.     Any    court    having    jurisdiction    of    any    estate    in 

order  of  court,   process    of    administration,    or    any    other    proceeding,    may,    on 

application  of  any  person  interested  therein,  or  the  person  who  has 


BANK   ACT   OF   CALIFORNIA  71 

been  selected  by  said  court,  or  a  judge  thereof,  as  executor,  admin- 
istrator, guardian,  assignee,  receiver,  depositary  or  trustee,  after 
such  notice  to  the  parties  in  interest  as  the  court  shall  direct,  or 
without  notice  if  all  parties  in  interest  consent  thereto,  and  a 
hearing  on  such  application,  order  any  executor,  administrator, 
guardian,  assignee,  receiver,  depositary  or  trustee  so  selected  or 
appointed,  whether  such  person  has  duly  qualified  or  not,  to 
deposit  with  any  such  trust  company,  for  safe-keeping,  such  portion 
or  all  of  the  personal  assets  of  said  estate  as  the  court  shall  deem 
proper,  and  upon  such  deposit  being  made,  the  court  shall  by  an 
order  of  record  reduce  the  bond  to  be  given  or  theretofore  given 
by  such  officer  or  trustee,  so  as  to  cover  only  the  estate  remaining 
in  the  hands  of  said  officer  or  trustee;  and  the  property  so  deposited 
shall  thereupon  be  held  by  such  trust  company,  under  the  order 
and  direction  of  said  court. 

Sec.  94.  Such  trust  company  shall  not  be  required  to  give  Responsibility) 
any  bond  or  security  in  case  of  any  appointment  or  deposit  of  for  investments. 
moneys  or  other  personal  assets  hereinbefore  provided  for,  except 
as  provided  in  this  act,  but  shall  be  responsible  for  all  investments 
which  shall  be  made  by  it  of  the  funds  which  may  be  entrusted  to 
it  for  investment  by  such  court,  and  shall  be  liable  to  the  same 
extent  as  an  individual,  and  as  hereinafter  provided. 

Sec.   95.     Such  trust  company  shall  pay  interest  upon  Payment  of 
all  moneys  so  deposited  with  it  at  such  rate  as  may  be  agreed  interest. 
upon  at  the  time  of  its  acceptance  of  any  such  deposit,  or 
as  shall  be  provided  by  the  order  of  court  and  agreed  to 
by  such  trust  company. 

Sec.  96.     Any  such  trust  company,  if  its  principal  place  Bonds  or 
of  business  is  situated  in  a  city  the  population  of  which  securities  to  be 
does   not   exceed   one   hundred   thousand   persons,    before  deposited  with 
accepting  any  such  appointment  or  deposit,  shall  deposit  state  treasurer. 
with  the  state  treasurer,  as  herein  provided,  at  least  fifty 
thousand  dollars  as  security  for  the  faithful  performance 
and  execution  of  all  court  trusts  accepted  by  it,  and  shall 
also  deposit  with  the  state  treasurer  at  least  fifty  thousand 
dollars  as  security  for  the  faithful  performance  and  execu- 
tion of  all  private  trusts  accepted  by  it;   and  whenever  any 


72 N.    W.    HALSEY   &   CO. 

such  trust  company  shall  under  the  provisions  of  section 
ninety-eight  of  this  act  be  required  to  make  the  first 
additional  deposit  of  securities  with  the  state  treasurer 
such  trust  company  must  also  deposit  with  the  state 
treasurer  an  additional  fifty  thousand  dollars  as  security 
for  the  faithful  performance  and  execution  of  all  private 
trusts  accepted  by  it;  and  any  trust  company  if  its 
principal  place  of  business  is  situated  in  a  city  the  popula- 
tion of  which  exceeds  one  hundred  thousand  persons,, 
before  accepting  any  such  appointment  or  deposit,  shall 
deposit  with  the  state  treasurer,  as  herein  provided  at  least 
one  hundred  thousand  dollars,  as  security  for  the  faithful 
performance  and  execution  of  all  court  trusts  accepted  by 
it,  and  shall  also  deposit  with  the  state  treasurer  at  least 
one  hundred  thousand  dollars  as  security  for  the  faithful 
performance  and  execution  of  all  private  trusts  accepted 
by  it.  Any  such  deposit  may  be  made  either  in  lawful 
money  of  the  United  States,  or  in  securities  of  either  or 
any  of  the  following  classes: 

(a)  Bonds  issued  by  the  United  States  or  by  this  state 
or  by  any  county,  city  and  county,  city  or  school  district 
therein ; 

(b)  Bonds  for  the  payment  of  which  the  faith  and  credit 
of  the  United  States  or  of  this  state  are  pledged; 

(c)  Notes  or  bonds  secured  by  mortgage  or  deed  of 
trust  constituting  a  first  lien  on  improved  and  productive 
real  estate  in  the  State  of  California;  such  improved  real 
estate  being  worth  at  least  double  the  amount  of  such  lien. 
Such  money  or  securities  shall  be  first  approved  by  the 
superintendent  of  banks  and,  upon  his  written  order, 
deposited  with  the  state  treasurer  for  the  respective  pur- 
poses herein  specified,  and  said  treasurer  shall  give  his 
receipt  therefor,  and  thereafter,  subject  to  the  provisions 
of  this  act,  shall  hold  such  deposits  of  money  or  securities 
separately,  each  for  the  sole  benefit  of  the  beneficiaries  of 
the  class  of  trust  business,  for  the  security  and  protection 
of  which  the  same  was  deposited,  and  said  treasurer  shall 
give  his  receipt  therefor  and  the  state  shall  be  responsible 


BANK   ACT   OF   CALIFORNIA 73 

for  the  custody  and  safe  return  of  any  money  or  securities 
so  deposited.     Said  securities  or  money  so  deposited  may,  Securities 
with  the  approval  of  the  superintendent  of  banks,  be  with-  ma})  be 
drawn   or   exchanged   from   time   to   time   for   other   like  reithdraxvn. 
securities,  or  lawful  money,  receivable  as  aforesaid,  and  so 
long  as  the  trust  company  so  depositing  said  money  or 
securities  shall  continue  solvent,  it  shall  have   the   right 
and  shall  be  permitted  by  the  state  treasurer  to  receive 
the  interest  and  dividends  on  any  securities  so  deposited. 
Said  securities  and  money  shall  be   subject  to  sale   and 
transfer,  and  to  the  disposal  of  the  proceeds  by  said  state 
treasurer,    only    on    the    order   of    a    court    of    competent 
jurisdiction  and  for  the  benefit  respectively  of  the  bene- 
ficiaries of  that  class  of  trust  business  for  the  security  and 
protection  of  which  the  same  were  deposited. 

Sec.  97.  Any  such  trust  company,  having  a  capital  and  surplus  Property  may 
of  two  hundred  thousand  dollars  or  more  apportioned  and  set  aside  be  mortgaged. 
as  security  for  the  faithful  performance  and  execution  of  all  court 
trusts  accepted  by  it,  as  provided  in  this  act,  and  which  is  wholly 
or  in  part  invested  in  the  lot  and  building  in  which  its  business  is 
carried  on,  may  be  permitted  by  the  superintendent  of  banks  to 
mortgage  such  lot  and  building  to  the  state  treasurer  for  such  sum, 
up  to  its  full  market  value,  as  the  superintendent  of  banks  may 
determine,  and  such  mortgage  may  be  deposited  with  said  treasurer, 
and  when  so  deposited  it  shall  be  included  in  the  amount  of 
securities  herein  required  to  be  deposited  with  said  treasurer  as 
security  for  the  faithful  performance  of  all  such  court  trusts. 

Sec.  98.     Whenever  any  trust  company,  the  principal  place  of  Amount  of 
business  of  which  is  located  in  a  city  the  population  of  which  does  deposit  required 
not    exceed    one    hundred    thousand    persons,    receives    from    court  <**  security  for 
trusts  accepted  by  it,  trust  funds,  as  herein  defined,  to  the  amount  'rus'  funds. 
of    five    hundred    thousand    dollars,    it    shall    forthwith    notify    in 
writing  the  superintendent  of  banks  of  such  fact,  and  within  thirty 
days    thereafter    shall    deposit    with    the    state    treasurer    additional 
money    or    securities    of    the    character    mentioned    and    defined    in 
section  ninety-six  of  this  act,  approved  as  therein  provided,   in  the 
amount  of  fifty  thousand  dollars;    and  whenever  any  trust  company 
receives  from  court  trusts  such  funds  to  the  amount  of  one  million 


74  N.    W.    HALSEY    &   CO. 

dollars  it  shall  further  notify  in  writing  the  superintendent  of  banks 
of  such  fact  and  within  thirty  days  thereafter  shall  deposit  with  the 
state  treasurer  additional  money  or  securities  of  the  character 
mentioned  and  defined  in  section  ninety-six  of  this  act,  approved  as 
therein  provided,  in  the  amount  of  fifty  thousand  dollars;  and  for 
each  additional  five  hundred  thousand  dollars  of  such  trust  funds 
thereafter  received  by  any  trust  company  from  court  trusts  a  similar 
notification  in  writing  shall  forthwith  be  given  to  the  superintendent 
of  banks,  and  a  further  deposit  in  the  amount  of  twenty-five 
thousand  dollars  of  such  money  or  securities,  or  of  securities 
provided  for  in  section  ninety-seven  of  this  act  likewise  approved, 
shall  be  made,  within  thirty  days  thereafter,  by  such  trust  company 
with  said  state  treasurer.  The  treasurer  shall  give  his  receipt  for 
any  money  or  securities  so  deposited  and  each  and  all  of  said 
deposits  of  money  or  securities,  shall  be  held  by  said  state  treasurer 
for  the  sole  benefit  of  the  beneficiaries  of  the  class  of  business  for 
the  security  and  protection  of  which  same  were  deposited.  The 
state  shall  be  responsible  for  the  custody  and  safe  return  of  any 
money  or  securities  so  deposited  with  said  state  treasurer.  The  term 
Term  "trust  funds"  when  used  in  this  section  shall  be  deemed  to  mean 
"Trust  Fund."  ant^  sna^  mean  personal  property  and  cash,  whether  received  with 
the  original  trust  property  or  as  rent,  income  or  proceeds  thereof, 
or  otherwise,  in  connection  with  the  trust,  and  shall  not  be  deemed 
to  include  and  shall  not  include  real  property.  Any  trust  company 
failing  to  comply  with  the  provisions  of  this  section  shall  forfeit  to 
the  State  of  California  one  hundred  dollars  a  day  for  each  day 
during  which  such  failure  or  default  shall  continue.  Upon  making 
a  request  in  writing  to  the  superintendent  of  banks,  any  such  trust 
Trust  company)  company  shall  be  entitled  to  withdraw  from  the  state  treasurer, 
ma))  withdraw  from  time  to  time,  a  sufficient  amount  of  such  securities  so  that  at 
securities,  all  times  the  amount  of  such  securities  so  deposited  shall  conform 
to  the  requirements  of  this  act,  and  so  that  at  no  time  shall  such 
trust  company  be  required  to  have  on  deposit  with  the  state  treasurer 
an  amount  of  securities  in  excess  of  the  requirements  of  this  act. 
Upon  receiving  such  request  in  writing,  and  satisfactory  proof  of 
the  facts  warranting  such  withdrawal,  it  shall  be  the  duty  of  the 
superintendent  of  banks  to  forthwith  deliver  to  the  state  treasurer  a 
written  order  directing  the  withdrawal  of  said  securities  so  as  to 


BANK   ACT   OF   CALIFORNIA  75 

conform  with  the  provisions  of  this  section,  and  it  shall  be  the  duty 
of  the  state  treasurer  to  comply  with  such  written  order.  The 
validity  or  legality  of  any  act  or  proceeding  done  or  taken  by 
any  such  trust  company,  relating  to  or  in  connection  with  the 
administration  of  any  such  trusts,  shall  not  be  affected  or  impaired 
by  the  neglect  or  failure  of  such  trust  company,  or  of  any  officer 
or  employee  thereof,  to  comply  with  any  of  the  provisions  of  this 
act,  but  all  such  acts  and  proceedings  done  or  taken  prior  to  the 
revocation  of  its  certificate  of  authority  to  do  such  business  by  the 
superintendent  of  banks,  under  the  provisions  of  this  act,  or  the 
revocation  by  any  court  or  judge  thereof  of  the  appointment,  order 
or  decree  theretofore  entered  in  such  trust  matter  shall  be  as  valid 
and  effective  for  all  purposes  as  if  any  such  neglect  or  failure  had 
not  occurred. 

Sec.  99.     When  any  part  of  the  securities  so  deposited  with  Certificates  of 
the  state  treasurer  consists  of  notes  or  bonds  secured  by  mortgage  title  required 
or  deed  of  trust,  it  shall  be  accompanied  by  a  complete  abstract  with  mortgages 
of   title   or   an    unlimited   certificate   of    title  or   a   policy    of    title  deposited. 
insurance  prepared  or  issued  by  a  person,  company  or  corporation 
designated    or    approved    by    the    superintendent    of    banks    and 
authorized   by   law   or   otherwise   found   by   the   superintendent   of 
banks  to  be  competent  to  issue  such  evidence  of  title,  which  shall 
be    examined    and    approved    by    or    under    the    direction    of    said 
superintendent   of   banks.      The   fees   for    an    examination   of   such  Fees  of 
evidence  of  title  by  counsel  to  be  paid  by  the  trust  company  making  counsel  and 
the  deposit  shall  not  exceed  twenty  dollars  for  each  title  examined,  appraisers 
and  the  fee  for  each  appraiser  not  exceeding  two,  shall  not  exceed  making 
five  dollars  for  each  mortgage  or  deed  of  trust.  examination. 

Section  one  hundred  repealed  1913. 

Sec.   101.     For  the  purposes  of  this  act,  all  trusts  permitted  to  Lists  of  trusts. 
be  accepted  or  executed  by   any   such   trust  company,   under   any 
provision  of  this  act  are  hereby  classified  and  defined  as  either: 

(a)  Court  trusts;    or 

(b)  Private  trusts. 

A  court  trust  is  one  in  which  any  such  trust  company  acts  under 
appointment,  order  or  decree  of  any  court,  as  executor,  adminis- 
trator,   guardian,    assignee,    receiver,    depositary   or    trustee,    or   in 


76 


N.    W.    HALSEY    &   CO. 


which  it  receives  on  deposit  from  a  public  administrator,  under 
any  provision  of  this  act,  or  from  any  executor,  administrator, 
guardian,  assignee,  receiver,  depositary  or  trustee,  under  any  order 
or  decree  of  any  court,  money  or  property.  Any  other  trust  is  a 
private  trust.  The  inspection  and  supervision  of  the  superintendent 
of  banks  shall  extend  only  to  court  trusts  as  herein  denned.  Private 
trusts  shall  not  be  subject  to  the  inspection  or  supervision  of  the 
superintendent  of  banks,  his  attorneys,  examiners  or  other  assist- 
ants. In  making  the  reports  to  the  superintendent  of  banks  required 
by  this  act,  every  trust  company  shall,  in  addition  to  the  other 
facts  to  be  reported  by  it,  furnish  only  a  list  and  brief  description 
of  the  court  trusts  held  by  it,  the  source  of  appointment  thereto, 
the  authority  by  which  the  appointment  or  deposit  was  made,  and 
the  amount  of  real  or  personal  property  held  by  such  trust  company 
by  virtue  thereof. 


Retiring  from 
business. 


Sec.  102.  Any  corporation  which  desires  to  withdraw  from 
and  discontinue  doing  a  trust  business  shall  furnish  to  the  superin- 
tendent of  banks  satisfactory  evidence  of  its  release  and  discharge 
from  all  the  obligations  and  trusts  hereinbefore  provided  for,  and 
thereupon  the  superintendent  of  banks  shall  revoke  his  certificate  of 
authority  to  do  a  trust  business  theretofore  issued  to  such  corpora- 
tion, and  the  state  treasurer  shall  return  to  said  corporation  all  the 
securities  deposited  by  such  corporation  and  shall  cancel  any 
mortgage  made  by  such  corporation  to  said  state  treasurer  as  a 
part  of  such  securities,  and  thereafter  such  corporation  shall  not  be 
permitted  to  use  and  shall  not  use  the  word  "trust"  in  its  corporate 
name  or  in  connection  with  its  business. 


Confidential        Sec.     103.     Any    trust    company    exercising    the    powers    and 

relations  of    performing  the   duties   provided    for    in    this    act,    shall,    except   as 

trust  company    herein   otherwise   provided,    keep   inviolate   all    communications    and 

to  clients,    writings  made  to  or  by  said  trustee  touching  the  existence,  condition, 

management  and  administration  of  any  private  trust  confided  to  it; 

and  no  creditor  or  stockholder  of  any  such  trust  company  shall  be 

entitled  to  disclosure  or  knowledge  of  any  such  communication  or 

writing;      provided,     however,     that    the    president,     vice-president, 

manager,  trust  officer,   secretary  or  regularly  employed  attorney  of 

any  such  trust  company  shall  be  entitled  to  knowledge  of  any  such 


BANK   ACT   OF   CALIFORNIA 77 

communication  or  writing;  and  provided  further,  that  in  any  suit 
or  proceeding  touching  the  existence,  condition,  management  or 
administration  of  any  such  trust,  the  court  wherein  the  same  is 
pending  may  require  disclosure  of  any  such  communication  or 
writing. 

Section  one  hundred  four  repealed  1913. 

Sec.  105.  Every  trust  company  shall,  except  as  other-  Investment  of 
wise  provided  by  law,  invest  its  capital  and  surplus  and  trust  funds. 
any  trust  funds  received  by  it  in  connection  with  its  trust 
business,  in  accordance  with  the  laws  relative  to  the 
investment  or  loan  of  funds  deposited  with  savings  banks, 
unless  a  specific  agreement  to  the  contrary  is  made 
between  the  trust  company  and  the  party  creating  the 
trust,  or  unless  it  is  otherwise  ordered  by  the  court,  in 
connection  with  any  court  trust. 

Sec.  106.  Any  such  trust  company  desiring  to  do,  or  doing,  Department 
a  commercial  banking  business  or  a  savings  bank  business,  or  both,  business. 
in  addition  to  its  trust  business  shall  have  actually  paid  up,  in 
cash,  the  amount  of  capital  provided  in  section  twenty-three  of  this 
act.  Any  title  insurance  company  authorized  by  its  articles  of 
incorporation  to  do,  or  doing  a  trust  business,  in  addition  to  its  title 
insurance  business,  shall  comply  with  all  the  requirements  of  any 
law  governing  trust  companies,  and  shall  have  a  capital  stock 
actually  paid  in,  in  cash,  of  not  less  than  two  hundred  thousand 
dollars,  and  in  addition  thereto,  the  capital  stock  required  by  law 
for  doing  a  title  insurance  business.  Such  capital  for  each  such 
department  or  class  of  business  shall  be  increased  from  time  to 
time  in  the  same  manner  and  to  the  same  extent  as  though  each 
such  department  or  class  of  business  was  conducted  by  a  separate 
bank,  trust  company  or  title  insurance  company,  instead  of  as 
separate  departments  or  classes  of  business.  Any  trust  company 
and  any  title  insurance  company  doing  a  departmental  business  as 
above  provided  shall  comply  with  the  provisions  of  this  act 
governing  each  of  such  departments  and  with  the  provisions  of  any 
law  governing  each  such  class  of  business  as  to  its  deposits,  reserve, 
surplus,  investments  and  loans. 


78 N.    W.    HALSEY    &   CO. 

Sec.  107.  Any  corporation  doing  a  departmental  business  as 
a  title  insurance  company  and  as  a  trust  company,  shall,  as  to  its 
trust  department,  be  subject  to  the  supervision  and  inspection  of 
the  superintendent  of  banks,  and  as  to  its  trust  department  must 
make  all  reports  to  the  superintendent  of  banks  required  to  be 
made  by  trust  companies  by  the  provisions  of  this  act,  and  as  to 
its  trust  department  such  corporation  shall  also  be  subject  to,  and 
shall  have  the  benefit  of  all  other  provisions  and  requirements  of 
this  act  applicable  to  trust  companies,  and  shall  also  be  subject  to 
and  shall  have  the  benefit  of  all  of  the  banking  laws  and  rules 
and  regulations  of  the  banking  department  of  this  state  applicable 
to  trust  companies.  The  proportionate  part  of  the  state  banking 
fund  provided  for  by  section  one  hundred  twenty-three  of  this 
act,  that  shall  be  payable  by  such  corporation,  shall  be  based  on 
the  amount  of  capital  and  surplus  of  such  corporation  apportioned 
to  its  trust  department. 

Article  V. 

STATE  BANKING  DEPARTMENT. 

Superintendent  Sec.  120.  There  is  hereby  created  a  state  banking  department. 
of  banks.  The  chief  officer  of  such  department  shall  be  the  superintendent 
thereof,  and  be  known  as  the  superintendent  of  banks.  He  shall  be 
appointed  by  the  governor,  and  shall  hold  office  at  the  pleasure  of 
the  governor.  He  shall  not,  either  directly  or  indirectly,  be  inter- 
ested in  any  commercial  bank,  savings  bank  or  trust  company,  or  as 
an  individual  banker.  He  shall  receive  an  annual  salary  of  ten 
thousand  dollars,  to  be  paid  monthly  out  of  the  state  treasury  on  a 
warrant  of  the  controller.  He  shall,  within  fifteen  days  from  the 
time  of  notice  of  his  appointment,  take  and  subscribe  to  the  consti- 
tutional oath  of  office,  and  file  the  same  in  the  office  of  the  secretary 
of  state,  and  execute  to  the  people  of  the  state  a  bond  in  the  penal 
sum  of  fifty  thousand  dollars,  with  corporate  surety  or  two  or  more 
sureties  to  be  approved  by  the  governor  of  the  state,  conditioned 
for  the  faithful  discharge  of  the  duties  of  his  office. 

Sec.  121.  The  superintendent  of  banks  shall  employ  a  chief 
deputy,  attorney  and  such  examiners  and  other  assistants  as  he 
may  need  to  discharge  in  a  proper  manner  the  duties  imposed  upon 
him  by  law,  none  of  which  examiners  or  assistants  or  attorney 
shall  be  interested  in  any  bank  in  this  state  as  director,  stockholder, 


BANK   ACT   OF   CALIFORNIA 79 

officer  or  employee,  and  they  shall  perform  such  duties  as  he  shall 
assign  to  them.  He  shall  fix  the  compensation  of  the  chief  deputy, 
attorney,  examiners  and  other  assistants,  which  compensation  shall 
be  paid  monthly  on  his  certificate  and  on  the  warrant  of  the 
controller  out  of  the  state  treasury.  The  chief  deputy  shall  within  Chief  deputy 
fifteen  days  from  the  time  of  his  appointment  take  and  subscribe  to  superintendent. 
the  constitutional  oath  of  office  and  file  the  same  in  the  office  of 
the  secretary  of  state.  No  person  shall  be  appointed  a  chief 
deputy  who  has  not  had  at  least  three  years'  active  banking 
experience,  either  as  an  executive  officer  or  employee  of  some  bank 
in  this  state.  In  case  of  the  absence  or  inability  to  act,  or  vacancy 
in  the  office  of  the  superintendent  of  banks  for  thirty  consecutive 
days,  the  chief  deputy  shall  execute  to  the  people  of  the  state  a 
bond  in  the  penal  sum  of  fifty  thousand  dollars,  with  corporate 
surety  or  two  sureties  to  be  approved  by  the  controller  and  treasurer 
of  the  state,  conditioned  for  the  faithful  discharge  of  the  duties 
of  the  superintendent  while  such  deputy  acts  as  superintendent,  and 
upon  filing  such  bond  such  deputy  shall  have  all  the  power  and 
duties  of  superintendent  of  banks,  until  the  inability  of  the  superin- 
tendent shall  be  removed,  or  until  a  new  superintendent  of  banks 
shall  have  been  appointed  by  the  governor.  No  superintendent  of 
banks,  chief  deputy,  or  bank  examiner,  shall  be  or  shall  become 
indebted,  directly  or  indirectly,  either  as  borrower,  endorser,  surety, 
or  guarantor,  to  any  bank  under  his  supervision  or  subject  to  his 
examination. 

Sec.  122.  The  superintendent  of  banks  shall  have  his  principal  Location  of 
office  in  the  city  of  San  Francisco,  and  may  also  have  suitable  offices. 
rooms  in  the  city  of  Los  Angeles,  wherein  to  conduct  the  business 
of  the  state  banking  department.  The  superintendent  shall,  from 
time  to  time,  obtain  the  necessary  furniture,  stationery,  fuel,  lights, 
and  other  proper  conveniences  for  the  transaction  of  such  business; 
the  expense  of  which  shall  be  paid  out  of  the  state  treasury  on  the 
certificate  of  the  superintendent  and  the  warrant  of  the  controller. 

Sec.   1 23.     A  fund  is  hereby  created  to  be  known  as  the  state   State  banking 
banking  fund,  and  out  of  said  fund  shall  be  paid  all  the  expenses   fund. 
incurred  in  and  about  the  conduct  of  the  business  of  the  banking 
department,  including  the  salary  of  the  superintendent,  chief  deputy, 
attorney,    examiners    and    other    assistants,    traveling   expenses,    fur- 


80 N.    W.    HALSEY    &   CO. 

nishing  of  rooms  and  rent.  Each  bank  shall  pay  annually  its 
share  of  eighty-seven  thousand  five  hundred  dollars,  to  be  deter- 
mined by  the  proportion  which  the  capital  and  surplus  which  shall 
include  all  reserve  and  contingent  funds,  of  any  incorporated  bank 
or  the  surplus,  reserve  and  contingent  funds  of  any  bank  organized 
without  a  capital  stock  bear  to  the  capital,  surplus,  reserve  and 
contingent  funds  in  the  aggregate  of  all  such  banks  receiving 
certificates  of  authorization  from  the  superintendent  of  banks,  as 
shown  by  the  last  report  of  such  bank  to  the  superintendent  of 
banks.  All  moneys  collected  or  received  by  the  superintendent  of 
banks,  under  and  by  virtue  of  the  provisions  of  this  act,  shall 
be  by  him  delivered  to  the  treasurer  of  the  state,  who  shall  deposit 
the  same  to  the  credit  of  said  banking  fund,  and  the  unexpended 
balances  of  all  moneys  heretofore  paid  into  the  state  treasury  by 
any  of  the  bank  commissioners  or  the  superintendent  of  banks, 
shall  be  retained  and  become  a  part  of  said  fund;  provided, 
however,  that  the  superintendent  shall  have  authority  to  retain  in 
his  possession  and  under  his  control  the  sum  of  five  hundred  dollars 
to  be  used  by  him  as  a  revolving  fund  for  the  benefit  of  the  state 
banking  department  until  the  end  of  the  fiscal  year  at  which  time 
he  shall  make  full  settlement  with  the  treasurer  of  the  state.  If 
any  such  bank  shall  fail  to  pay  such  charges  as  are  herein  required, 
the  superintendent  shall  forthwith  cancel  the  certificate  of  said  bank. 
Inspection  Sec.  124.  Every  bank  and  the  trust  department  of  every  title 
of  banks,  insurance  company  doing  a  trust  business,  shall  be  subject  to  the 
inspection  of  the  superintendent  of  banks.  The  superintendent  of 
banks,  the  chief  deputy,  or  some  competent  person  or  persons  to  be 
appointed  by  the  superintendent  of  banks,  to  be  known  as  examiners, 
shall  visit  and  examine  every  bank  at  least  once  each  fiscal  year. 
On  every  such  examination  inquiries  shall  be  made  by  him  as  to 
the  condition  and  resources  of  the  bank,  the  mode  of  conducting 
and  managing  its  affairs,  the  action  of  its  directors,  the  investment 
and  disposition  of  its  funds,  the  safety  and  prudence  of  its  manage- 
ment, the  security  afforded  to  those  by  whom  its  engagements  are 
held  and  whether  the  requirements  of  its  articles  of  incorporation 
and  the  law  have  been  complied  with  in  the  administration  of  its 
affairs,  and  as  to  such  other  matters  as  the  superintendent  may 
prescribe.  Whenever,  in  the  judgment  of  the  superintendent  of 
banks,  the  condition  of  any  bank  renders  it  necessary  or  expedient 


BANK   ACT   OF   CALIFORNIA 81 

to  make  an  extra  examination  or  to  devote  any  extraordinary 
attention  to  its  affairs,  the  superintendent  of  banks  shall  have 
authority  to  make  any  and  all  necessary  extra  examinations  and  to 
devote  any  necessary  extra  attention  to  the  conduct  of  its  affairs ;  and 
such  bank  shall  pay  for  all  such  extra  services  rendered  by  the  super- 
intendent of  banks  at  a  price  to  be  fixed  by  the  superintendent  of 
banks  but  not  to  exceed  twenty  dollars  per  day.  The  superintendent  Branches  of 
of  banks  shall  also  have  power  to  examine,  or  cause  to  be  examined,  foreign  banks. 
every  agency  located  in  this  state  of  any  foreign  bank  or  banking 
corporation,  for  the  purpose  of  ascertaining  whether  it  has  complied 
with  the  laws  of  this  state,  and  for  such  other  purposes  and  as  to 
such  other  matters  as  the  superintendent  may  prescribe.  The  super- 
intendent, chief  deputy,  and  every  such  examiner  shall  have  the 
power  to  administer  an  oath  to  any  person  whose  testimony  he  may 
require  on  the  examination  of  any  bank,  or  on  the  examination  of 
any  agency  of  any  foreign  bank  or  banking  corporation,  and  to 
compel  appearance  and  attendance  of  any  such  person  for  the  pur- 
pose of  any  such  examination.  When  a  bank  shall  have  been  ex- 
amined by  any  examiner,  and  he  finds  securities  therein  which  are, 
in  his  judgment,  of  doubtful  value,  he  shall  report  the  same  to  the 
superintendent  of  banks,  who  thereupon  shall  be  authorized  to 
employ  appraisers  at  the  expense  of  such  bank  to  appraise  said 
securities,  at  a  compensation  to  be  fixed  by  the  superintendent  of 
banks.  The  superintendent  of  banks  shall,  whenever  requested  to 
do  so  by  any  bank,  provide  an  auditor  to  make  an  audit  of  the 
affairs  of  such  bank.  The  compensation  for  making  such  audit 
shall  be  paid  by  the  bank*  direct  to  the  person  making  the  audit. 
Nothing  herein  shall  be  deemed  to  authorize  or  require  the  super- 
intendent of  banks  to  inspect  or  supervise  the  private  trust  business 
or  title  insurance  business  of  any  corporation  doing  a  trust  business. 

Sec.  125.  Every  examiner  appointed  by  the  superintendent  of  Examiners. 
banks  shall,  before  entering  upon  the  discharge  of  his  duties,  take 
the  constitutional  oath  of  office  and  cause  the  same  to  be  filed  in 
the  office  of  the  secretary  of  state.  No  such  examiner  shall  be 
appointed  receiver  of  any  bank  whose  books,  papers  and  affairs  he 
shall  have  examined  pursuant  to  his  appointment. 


82 


N.    W.    HALSEY   &   CO. 


Neglect  to        Sec.    126.      If   the   chief  deputy  or   any   examiner   shall   have 

report  unsafe   knowledge    of    the    insolvency    or    unsafe    condition    of    any    bank 

condition.   mentioned  in  this  act,  and  that  it  is  unsafe  or  inexpedient  to  permit 

said  bank  to  continue  business,  and  shall  neglect  to  forthwith  report 

such  fact  in  writing  over  his  signature  to  the  superintendent  of  banks, 

he  shall  be  guilty  of  felony. 

Certificate  from  Sec.  127.  No  bank  shall  transact  any  business  in  this  state 
superintendent  without  the  written  approval  of  the  superintendent  of  banks,  and 
necessar})  for  without  his  written  certificate  stating  that  it  has  complied  with  the 
transaction  of  provisions  of  this  act,  and  all  the  requirements  of  law,  and  that  it  is 
banking  business,  authorized  to  transact,  within  this  state,  the  business  specified 
therein;  which  certificate  may  be  withheld  by  the  superintendent  of 
banks  whenever  he  has  reason  to  believe  that  the  bank  is  being 
formed  for  any  other  than  the  legitimate  objects  contemplated  by 
this  act  or  whenever  he  has  reason  to  believe  that  the  public  con- 
venience and  advantage  will  not  be  promoted  by  the  opening  of  such 
bank,  or  whenever  he  has  reason  to  believe  that  the  corporate  name 
assumed  by  such  bank,  by  reason  of  the  use  by  it  of  any  one  or 
more  of  the  words  "commercial,"  "trust,"  or  "savings,"  in  con- 
junction with  any  other  word  or  words,  resembles  so  closely  as  to 
be  likely  to  cause  confusion,  the  name  of  any  other  bank  previously 
formed  under  the  laws  of  this  state.  Before  issuing  such  certificate 
the  superintendent  of  banks  shall  examine,  or  cause  an  examina- 
tion to  be  made,  in  order  to  ascertain  whether  the  requisite  capital 
of  such  bank  has  been  paid  up  in  cash  or  the  requisite  reserve 
or  surplus  fund  has  been  accumulated.  The  superintendent  of  banks 
shall  not  authorize  such  banks  to  commence  business  until  it  appears 
from  such  examination,  or  other  evidence  satisfactory  to  him,  that 
the  requisite  capital  has  been,  in  good  faith,  subscribed  and  paid  in, 
in  cash,  or  that  the  requisite  surplus  or  reserve  fund  has  been  accu- 
mulated or  paid  in,  in  cash,  and  until  said  bank  shall  have  paid  a 
fee  of  fifty  dollars  for  each  department  to  be  operated  by  said  bank. 


Investigation 
of  applications 
for  certificate. 


Sec.  128.  When  the  certified  copy  of  articles  of  incorporation 
of  any  bank  shall  have  been  filed  with  the  secretary  of  state,  and 
application  made  for  the  issuance  of  a  certificate  to  do  business  as 
a  bank,  the  superintendent  of  banks,  provided  he  has  not  withheld 
granting  his  certificate  for  any  of  the  reasons  set  forth  in  section  one 


BANK   ACT   OF   CALIFORNIA 83 

hundred  twenty-seven  hereof,  shall  ascertain,  from  the  best  sources 
of  information  at  his  command,  whether  the  character  and  general 
fitness  of  the  persons  named  as  stockholders  are  such  as  to  command 
the  confidence  of  the  community  in  which  such  bank  is  proposed  to 
be  located,  and,  if  so  satisfied,  he  shall,  within  sixty  days  after 
such  application  has  been  made  to  him,  issue,  under  his  hand  and 
official  seal,  the  certificate  of  authorization  required  by  this  act. 
The  superintendent  of  banks  shall  transmit  a  duplicate  of  such 
certificate  of  authorization  to  the  county  clerk  of  the  county  in  which 
the  principal  place  of  business  of  such  bank  is  located,  and  he  shall 
file  the  same  in  his  office.  The  superintendent  of  banks  shall  also 
file  a  duplicate  of  such  certificate  in  his  own  office. 

Sec.    1 29.      Every   bank   doing   a   departmental    business    shall  Reports  fcp 
render  to  the  superintendent  of  banks  for  each  department  conducted  departmental 
by  it,  a  separate  report  showing  in  detail  as  required  by  section  one  banks. 
hundred  thirty  of  this  act,   the  actual   financial   condition  of  such 
department  and  shall  at  the  time  of  furnishing  said  report  separately 
publish  the  statement  for  each  department  as  provided  in  section  one 
hundred  thirty-two  of  this  act. 

Sec.   1  30.     Every  bank,  organized  under  the  laws  of  this  state,   Character  of 
shall,  whenever  required  by  the  superintendent  of  banks,   make  a  report  required 
report  in  writing  to  him,  verified  by  the  oath  of  its  president  and  its  upon  demand  of 
secretary  or  cashier,  or  two  principal  officers.     Such  reports  shall  superintendent. 
show  the  actual  financial  condition  of  the  bank  making  the  report, 
at  the  close  of  any  past  day  designated  by  the  superintendent,  and 
shall  specify  the  following: 

1.  The  amount  of  its  capital  stock  and  the  number  of  shares   Capital. 
into  which  it  is  divided. 

2.  The  names  of  the  directors  and  the  number  of  shares  of   Names  of 
stock  held  by  each.  directors. 

3.  The  total  amount  of  capital  actually  paid  in,  in  cash,  and    Reserve  funds, 
the  total  amount  of  surplus,  reserve  and  any  other  funds.  etc. 

4.  The  total  amount  due  the  depositors. 

5.  The  total  amount  and  character  of  any  other  liabilities  it    Liabilities. 
may  have. 


84  N.    W.    HALSEY    &   CO. 


Real  estate.  6.  The  amount  at  which  the  lot  and  building  occupied  by  the 
bank  for  the  transaction  of  its  regular  business  stands  debited  on 
its  books;  also  the  market  value  of  all  other  real  estate  held, 
whether  acquired  in  settlement  of  loans  or  otherwise,  the  original 
cost  to  the  bank,  the  date  when  acquired,  the  amount  at  which  it 
stands  debited  on  the  bank  books,  in  what  counties  situated,  and  in 
what  name  the  title  is  vested,  if  not  in  the  name  of  the  bank  itself. 
Loans  on  7#  Yhe  amount  loaned  on  real  estate,  specifying  the  amount 
real  estate,  secured  on  real  estate  in  each  county  separately;  also  specifying 
the  name  of  the  person  in  whose  name  the  property  is  held  in  trust 
or  as  security,  in  case  it  is  held  in  any  name  other  than  that  of  the 
bank  and  the  instrument  creating  the  security  does  not  itself  disclose 
the  name  of  the  bank. 

Invested  in      8.  The  amount  invested  in  bonds,  designating  the  name 
bonds  and  stocks,  and  amount  of  each  particular  kind. 

9.  The  amount  loaned  on  stocks  and  bonds,  designating 
each  particular  class  and  the  amount  thereof. 

Other  securities.  ]  0.  The  amount  of  money  loaned  on  other  securities,  with  a 
particular  designation  of  each  class  and  the  amount  loaned  on  each. 

Money  on  hand.  \  \  t  "Yhe  amount  and  kind  of  money  on  hand  or  deposited  in 
any  other  bank  or  place,  with  the  name  of  the  place  where  deposited 
and  the  amount  in  each  place. 

Other  items.  \2.  Any  other  property  held,  or  any  amount  of  money  loaned, 
deposited,  invested  or  placed,  not  otherwise  herein  enumerated,  and 
the  place  where  situate  and  the  value  of  said  property,  and  the 
amount  so  loaned,  deposited  or  placed. 

Date  of  reports.  \  3.  The  date  on  which  examination  of  the  bank  was  last  made 
by  its  board  of  directors  and  the  date  on  which  report  of  such 
examination  was  filed,  as  required  by  section  one  hundred  thirty- 
nine  of  this  act. 

Loans  made        \  4.  The   outstanding  and  unpaid   amounts  of   any  loans  made 
by  banks,  by  the  bank,  which  under  the  provisions  of  either  section  sixty-five 

or   eighty-three   of    this    act    are   required    to    be    reported    to    the 

superintendent  of  banks. 
Overdrafts.        |5#  Any  overdrafts  and  any  loans,  investments,  acts  or  omissions 

violative  of  or  not  in   conformity  with  any  provision  of   this  act 

which  may  be  specifically  called  for. 


BANK   ACT   OF   CALIFORNIA  85 

Every    foreign   corporation   transacting   the   business   of   banking  Publication  of 
in  this  state  shall  make  the  report  herein  required  as  far  as  such  financial 
report  may  relate  to  the  affairs  of  such  corporation  in  this  state,  condition. 
and  every   foreign  corporation  must  particularly  render  the  report 
required  by  subdivisions   three,    four,    five,   six,   seven,   eight,   nine, 
ten,   eleven,   twelve,   thirteen,   fourteen   and  fifteen   of   this  section. 
Such  report  shall  be  made  in  writing  and  verified  by  the  oath  of 
one  of  its  duly  authorized  officers  or  managers  residing  in  this  state. 
The  oaths  of  the  officers  and  the  statements  above  required  shall 
state  that  they  and  each  of  them  have  a  personal  knowledge  of  the 
matters   therein   contained,   and   that   they  believe  every   allegation, 
statement,  matter,  and  thing  therein  contained  is  true.     Any  wilful 
false  statement  in  the  premises  shall  be  perjury  and  shall  be  punished 


as 


such. 


Sec.  1 30a.  In  addition  to  the  information  obtained  from  the  Special 
report  required  by  the  provisions  of  section  one  hundred  thirty  of  reports. 
this  act,  the  superintendent  of  banks  shall  also  have  the  power  to 
require  any  bank  to  furnish  a  special  report  in  writing  verified  as 
required  by  section  one  hundred  thirty  of  this  act,  whenever  in  his 
judgment  such  special  report  is  necessary  to  inform  him  fully  of 
the  actual  financial  condition  and  affairs  of  such  bank.  Any  wilful 
false  statement  in  the  premises  shall  be  perjury  and  shall  be 
punished  as  such. 

Sec.  131.  The  superintendent  of  banks  shall  call  for  the  Three  reports 
reports  specified  by  section  one  hundred  thirty  of  this  act  at  least  a  year. 
three  times  each  year.  The  "past  day  designated  by  the  super- 
intendent" of  banks,  under  the  provisions  of  section  one  hundred 
thirty  of  this  act,  shall  be  as  nearly  as  possible  the  day  designated 
by  the  comptroller  of  currency  of  the  United  States  for  reports  of 
national  banking  associations. 

Sec.   1 32.     At  the  time  of  furnishing  such  report  to  the  super-  Publication 
intendent  of  banks,  every  bank  shall  also  publish  a  condensed  state-  of  financial 
ment  of  its  financial  condition,  at  least  once,  in  some  newspaper  of  condition. 
general  circulation,  published  in  the  city  or  town  where  its  principal 
place  of  business  is  located,  and,  if  no  paper  is  published  in  such 
town,  then  in  some  newspaper  of  general  circulation  in  the  county 
where  its  principal  place  of  business  is  located.      Such  published 


86  N.   W.    HALSEY    &   CO. 

statement  shall  show  the  total  amount  of  loans,  the  total  amount  of 
overdrafts,  the  total  amount  invested  in  bonds  and  other  securi- 
ties, the  total  amount  due  from  banks,  the  total  amount  of  checks  and 
other  cash  items,  the  total  amount  of  cash  on  hand,  capital  paid 
in,  surplus  funds;  undivided  profits,  less  expenses  and  taxes  paid; 
due  to  other  banks  and  bankers,  due  to  trust  companies  and  savings 
banks;  individual  deposits  subject  to  checks;  demand  certificates  of 
deposit;  time  deposits;  certified  checks;  cashier's  checks  outstanding; 
and  such  other  items  as  will  show  the  actual  financial  condition  of 
the  bank  making  the  report. 

Reduction  of  Sec.  1 33.  Whenever  it  shall  appear  from  the  report  of  any 
capital  by  bank,  or  the  superintendent  of  banks  shall  have  reason  to  believe 

impairments,  that  the  capital  of  any  bank  is  impaired  or  reduced  below  the 
amount  required  by  law,  it  shall  be  the  duty  of  the  superintendent 
of  banks  and  he  shall  have  the  power  to  examine  said  bank  and 
ascertain  the  facts,  and  in  case  he  finds  such  impairment  or  reduc- 
tion of  capital,  he  shall  require  such  bank  to  make  good  the 
deficiency  so  appearing  within  sixty  days  after  the  date  of  such 
requisition.  The  directors  of  every  such  bank,  upon  which  such 
requisition  shall  have  been  made,  shall  levy  an  assessment  upon  the 
stock  thereof  to  repair  such  deficiency,  and  shall  cause  notice  of 
such  requisition  to  be  given  to  each  stockholder  of  the  bank  and 
of  the  amount  of  the  assessment  which  he  must  pay  for  the  purpose 
of  making  good  such  deficiency,  by  a  written  or  printed  notice 
mailed  to  such  stockholder  at  his  last  known  address  or  served 
personally  upon  him.  If  any  stockholder  shall  refuse  or  neglect  to 
pay  the  assessment  specified  in  such  notice  within  thirty  days  from 
the  date  of  mailing  or  serving  such  notice  as  aforesaid,  the  directors 
of  such  bank  shall  have  the  right  to  sell  to  the  highest  bidder  at 
public  auction  the  stock  of  such  stockholder,  after  giving  a  previous 
notice  of  such  sale  for  ten  days  in  a  newspaper  of  general  circulation 
published  in  the  county  where  the  principal  place  of  business  of 
such  bank  is  located,  and  a  copy  of  such  notice  of  sale  shall  also 
be  served  on  the  owner  of  such  stock  by  being  served  personally 
on  him  or  by  mailing  to  his  last  known  address  ten  days  before 
the  day  fixed  for  such  sale;  or  such  stock  may  be  sold  at  private 
sdle  and  without  such  public  notice;    provided,  however,  that  before 


BANK   ACT   OF   CALIFORNIA  87 

making  such  private  sale  thereof  an  offer  in  writing  shall  first  be 
obtained  and  a  copy  thereof  served  upon  the  owner  of  record  of 
the  stock  sought  to  be  sold,  either  personally  or  by  mailing  a  copy 
of  such  offer  to  his  last  known  address;  and  if,  after  service  of 
such  offer,  such  owner  shall  still  refuse  or  neglect  to  pay  such 
assessment  within  two  weeks  from  the  time  of  the  service  of  such 
offer,  the  said  directors  may  accept  such  offer  and  sell  such  stock 
to  the  person  making  such  offer,  or  to  any  other  person  or  persons 
making  a  larger  offer  than  the  amount  named  in  the  offer  sub- 
mitted to  the  stockholder;  but  such  stock  shall  in  no  event  be  sold 
for  a  smaller  sum  than  the  valuation  put  on  it  by  the  superintendent 
of  banks  in  his  determination  and  requisition  as  to  said  assessment, 
nor  for  less  than  the  amount  of  said  assessment  so  called  for  and 
the  expense  of  sale.  Out  of  the  avails  of  the  stock  so  sold,  the 
directors  shall  pay  the  amount  of  assessment  levied  thereon,  and  the 
necessary  costs  of  sale,  and  the  balance,  if  any,  shall  be  paid  to 
the  person  or  persons  whose  stock  has  thus  been  sold.  A  sale  of 
stock  as  herein  provided  shall  effect  an  absolute  cancellation  of  the 
outstanding  certificate  or  certificates  evidencing  the  stock  so  sold, 
and  shall  make  the  same  null  and  void,  and  a  new  certificate  shall 
be  issued  by  the  bank  to  the  purchaser  thereof. 

Sec.  134.  If  it  shall  appear  to  the  superintendent  of  banks  Violations 
that  any  bank  has  violated  or  failed  to  comply  with  the  provisions  0f  articles 
of  its  articles  of  incorporation,  or  any  law  of  this  state,  he  may,  0f  incorporation. 
by  an  order  under  his  hand  and  official  seal,  which  seal  must  be 
adopted  by  him,  addressed  to  such  bank,  direct  such  bank  to 
discontinue  such  violation  and  to  comply  with  the  law;  or,  if  it 
shall  appear  to  the  superintendent  of  banks  that  such  bank  is 
conducting  business  in  an  unsafe  or  injurious  manner,  he  may,  in 
like  manner  direct  the  discontinuance  of  any  such  unsafe  or  injurious 
practices.  Such  order  shall  require  such  bank  to  show  cause,  before 
the  superintendent  of  banks,  at  a  time  and  place  to  be  fixed  by 
him,  why  said  order  should  not  be  observed.  If  upon  such 
hearing  it  shall  appear  to  the  superintendent  of  banks  that  such 
bank  is  conducting  business  in  an  unsafe  or  injurious  manner,  or  is 
violating  or  failing  to  comply  with  the  provisions  of  its  articles  of 
incorporation,  or  any  law  of  this  state,  then  the  superintendent  of 


88  N.    W.    HALSEY    &   CO. 


banks  shall  make  such  order  final,  and  such  bank  shall  immediately 
comply  with  such  order  made  by  the  superintendent  of  banks. 
Such  bank  shall  have  ten  days  after  any  such  order  is  made  final 
in  which  suit  may  be  commenced  to  restrain  enforcement  of  such 
order,  and  unless  such  action  be  so  commenced  and  enforcement  of 
said  order  be  enjoined  within  ten  days,  by  the  court  in  which  such 
suit  is  brought,  then  such  bank  shall  comply  with  such  order. 

Superintendent       Sec.    135.     Whenever  the  superintendent  of  banks  shall  deem 

may  call  it  expedient  he  may  call  a  meeting  of  the  stockholders  of  any  bank 

stockholders'  organized  under  the  laws  of  this  state,  by  a  personal  notice  of  such 

meeting,  meeting  for  fifteen  days  previous  thereto.     All   necessary   expense 

incurred  in  the  serving  of  such  notice  shall  be  borne  by  the  bank 

whose  stockholders  are  required  to  convene. 

Superintendent       ^EC*    '  ^a*     ^  t^ie  caP'ta^  or"  any  bank  shall  be  impaired,  or 

of  banks  mav  ^  an^  bank  shall  refuse  to  submit  its  books,  papers  and  concerns 

procure  *°  the  inspection  of  any  examiner,  or  if  any  officer  thereof  shall 

judgment  refuse   t°  be  examined  upon  oath   touching   the  concerns  of   such 

dissolving  bank,  or  if  such  bank  shall  violate  the  provisions  of  its  articles  of 

banks,  incorporation,  or  any  law  of  this  state,  or  if  such  bank  shall  suspend 

payment  of  its  obligations,  or  if  such  bank  shall  conduct  its  business 

in  an  unsafe  or  unauthorized  manner,  or  if  from  any  examination 

or  report  provided  for  by  this  act  the  superintendent  of  banks  shall 

conclude  that  such  bank  is  in  an  unsound  or  unsafe  condition  to 

transact  the  business  for  which  it  is  organized,  or  that  it  is  unsafe 

and  inexpedient  for  it  to  continue  business,  an  action  to  procure  a 

judgment   dissolving   such   corporation   may   be   maintained   by   the 

superintendent  of  banks. 

Sec.  136.  Whenever  it  shall  appear  to  the  superintendent  of 
banks  that  any  bank  has  violated  the  provisions  of  its  articles  of 
incorporation  or  any  law  of  this  state,  or  is  conducting  its  business 
in  an  unsafe  or  unauthorized  manner,  or  if  the  capital  of  any  bank 
is  impaired,  or  if  any  bank  shall  refuse  to  submit  its  books,  papers 
and  concerns  to  the  inspection  of  any  examiner,  or  if  any  officer 
thereof  shall  refuse  to  be  examined  upon  oath  touching  the  concerns 
of  any  such  bank,  or  if  any  bank  shall  suspend  payment  of  its 
obligations,  or  if  from  any  examination  or  report  provided  for  by 


BANK   ACT   OF   CALIFORNIA 89 

this  act  the  superintendent  of  banks  shall  have  reason  to  conclude 
that  such  bank  is  in  an  unsound  or  unsafe  condition  to  transact 
the  business  for  which  it  is  organized,  or  that  it  is  unsafe  and 
inexpedient  for  it  to  continue  business,  or  if  any  bank  shall  neglect 
or  refuse  to  observe  any  order  of  the  superintendent  of  banks 
specified  in  sections  one  hundred  thirty-three  or  one  hundred  thirty- 
four  of  this  act,  the  superintendent  of  banks  may  forthwith  take 
possession  of  the  property  and  business  of  such  bank  and  retain 
such  possession  until  such  bank  shall  resume  business,  or  its  affairs 
be  finally  liquidated  as  herein  provided.  On  taking  possession  of  Superintendent 
the  property  and  business  of  any  such  bank  the  superintendent  of  ma})  take 
banks  shall  forthwith  give  notice  of  such  fact  to  any  and  all  charge  of  banks. 
banks,  trust  companies,  associations  and  individuals,  holding  or  in 
possession  of  any  assets  of  such  bank.  No  bank,  trust  company, 
association  or  individual  knowing  of  such  taking  possession  by  the 
superintendent  of  banks,  or  notified  as  aforesaid,  shall  have  a  lien 
or  charge  for  any  payment,  advance  or  clearance  thereafter  made, 
or  liability  thereafter  incurred  against  any  of  the  assets  of  the  bank 
of  whose  property  and  business  the  superintendent  of  banks  shall 
have  taken  possession  as  aforesaid.  Such  bank  may,  with  the 
consent  of  the  superintendent  of  banks,  resume  business  upon  such 
conditions  as  may  be  approved  by  him.  Upon  taking  possession  of 
the  property  and  business  of  any  such  bank  the  superintendent  of 
banks  shall  have  authority  to  collect  moneys  due  to  such  bank  and 
do  such  other  acts  as  are  necessary  to  conserve  its  assets  and 
business,  and  shall  proceed  to  liquidate  the  affairs  thereof  as  here- 
inafter provided.  The  superintendent  of  banks  shall  collect  all  Superintendent 
debts  due  and  claims  belonging  to  it,  and  upon  the  order  of  the  may  collect 
superior  court  may  sell  or  compound  any  bad  or  doubtful  debts,  debts. 
If  a  purchaser  for  any  bad  or  doubtful  debts  cannot  be  obtained 
and  it  appears  improbable  that  recovery  thereon  can  be  had  and 
that  the  costs  of  actions  to  enforce  collection  of  the  same  would 
probably  be  lost,  the  court  may  direct  that  suits  thereon  need  not 
be  brought.  On  like  order  he  may  sell  any  real  or  personal 
property  of  such  bank  on  such  terms  as  the  court  shall  direct;  and 
may,  if  necessary  to  pay  the  debts  of  such  bank,  enforce  the  consti- 
tutional individual  liability  of  stockholders  by  action  to  be  brought 
within   three  years   after   the  date  of   his  taking  possession  of   the 


90  N.   W.    HALSEY   &   CO. 

affairs  of  such  bank.  The  superintendent  of  banks  shall  determine 
the  necessity  of  such  action  and  the  amount  necessary  to  recover 
Recovery  from  from  the  stockholders  to  fully  pay  all  liabilities  of  such  bank.  Such 
stockholders  action  may  be  in  equity  and  against  all  stockholders  upon  whom 
to  pay  banc's  service  of  process  in  the  State  of  California  can  be  had,  and  the 
liabilities,  court  may  therein  determine  and  provide  for  any  equities  as  between 
the  stockholders  including  the  proportions  of  each  stockholder  to 
any  surplus  of  money  or  assets  that  may  remain  after  the  payment 
of  all  liabilities  and  the  expenses  of  liquidation.  The  superintendent 
of  banks  may  also  maintain  an  action  against  any  stockholder 
residing  out  of  the  state  or  upon  whom  service  of  process  cannot  be 
had  within  the  state,  in  any  court  of  the  United  States  or  of  any 
state  or  country.  Any  judgment  so  obtained  by  the  superintendent 
of  banks  against  such  or  any  of  such  stockholders  which  is  of 
doubtful  value  may  be  compromised  and  compounded  by  the  super- 
intendent of  banks  on  such  terms  and  conditions  as  the  superior 
court  may  direct  or  authorize.  The  superintendent  of  banks  shall 
file  a  notice  of  pendency  of  action  in  the  county  recorder's  office 
of  the  county  where  such  action  is  brought.  At  any  time  prior  to 
the  trial  of  any  such  action,  any  creditor  may  serve  upon  the  super- 
intendent of  banks  and  file  with  the  court  wherein  such  action  is 
pending,  notice  that  he  elects  to  maintain  an  action  against  the 
stockholders  or  any  of  them,  in  his  individual  capacity  and  there- 
upon the  amount  sued  for  in  such  action  shall  be  reduced  accord- 
ingly and  such  creditor  shall  not  be  entitled  to  share  in  the  proceeds 
resulting  from  such  action  brought  by  the  superintendent  of  banks. 
For  the  purpose  of  executing  and  performing  any  of  the  powers 
and  duties  hereby  conferred  upon  him,  the  superintendent  of  banks 
may,  in  the  name  of  the  delinquent  bank  or  in  his  own  name, 
prosecute  and  defend  any  and  all  suits  and  other  legal  proceedings 
and  may,  in  the  name  of  the  delinquent  bank  or  in  his  own  name 
as  trustee  execute,  acknowledge  and  deliver  any  and  all  deeds, 
assignments,  releases  and  other  instruments  necessary  and  proper  to 
effectuate  any  sale  of  real  or  personal  property  or  sale  or  compromise 
or  compound  authorized  by  order  of  the  court  as  herein  provided; 
and  any  deed  or  other  instrument,  executed  pursuant  to  the  authority 
hereby  given,  shall  be  valid  and  effectual  for  all  purposes,  as 
though  the  same  had  been  executed  by  the  officers  of  the  delinquent 


BANK   ACT   OF   CALIFORNIA 91 

bank  by  authority  of  its  board  of  directors.     In  case  any  of  the 

real  property  so  sold  is  located  in  a  county  other  than  the  county 

in  which  the  application  to  the  court  for  leave  to  sell  the  same  is 

made,  the  superintendent  of  banks  shall  cause  a  certified  copy  of 

the  order  authorizing  or  ratifying  such  sale  to  be  filed  in  the  office 

of  the  recorder  of  the  county  in  which  the  said  real  property  is 

located.      The  superintendent  of  banks  may,   under  his  hand  and   Special 

official  seal,  appoint  one  or  more  special  deputy  superintendents  of   Deputy 

banks,  as  agent  or  agents,  with  the  powers  specified  in  the  certificate   Superintendents. 

of  appointment  hereinafter  mentioned,  to  assist  him  in  the  duty  of 

liquidation  and  distribution,  the  certificate  of  appointment  to  be  filed 

in  the  office  of  the  superintendent  of  banks,  and  a  certified  copy  in 

the  office  of  the  clerk  of  the  county  in  which  the  principal  office 

of  such  bank  is  located. 

The  superintendent  of  banks  may  from  time  to  time,  by  a  cer- 
tificate of  appointment  under  his  hand  and  official  seal,  specifying 
the  powers  conferred,  authorize  a  special  deputy  superintendent  to 
perform  such  duties  connected  with  such  liquidation  and  distribution 
as  the  superintendent  of  banks  may  deem  proper.  Such  certificate 
of  appointment  shall  be  filed  in  the  office  of  the  superintendent  of 
banks  and  a  certified  copy  in  the  office  of  the  clerk  of  the  county  in 
which  the  principal  office  of  such  bank  is  located.  The  superintendent  Liquidation  and 
of  banks  may  employ  such  counsel  and  procure  such  expert  assist-  distribution  of 
ance  and  advice  as  may  be  necessary  in  the  liquidation  and  bank's  assets. 
distribution  of  the  assets  of  such  bank,  and  for  that  purpose  may 
retain  such  of  the  officers  or  employees  of  such  bank  as  he  may 
deem  necessary.  The  superintendent  of  banks  shall  require  from  a 
special  deputy  superintendent  and  from  such  assistants  such  security 
for  the  faithful  discharge  of  their  duties  as  he  may  deem  proper. 
The  superintendent  of  banks  shall  cause  notice  to  be  given  by  adver- 
tisement, in  such  newspapers  as  he  may  direct,  weekly  for  three 
consecutive  months,  calling  on  all  persons  who  may  have  claims 
against  such  bank  to  present  the  same  to  the  superintendent  of  banks, 
and  make  legal  proof  thereof  at  a  place  and  within  a  time,  not 
earlier  than  the  last  day  of  publication,  to  be  therein  specified.  The 
superintendent  of  banks  shall  mail  a  similar  notice  to  all  persons 
whose  names  appear  as  creditors  upon  the  books  of  the  bank.  If 
the  superintendent  of  banks  doubts  the  justice  and  validity  of  any 


92 N.    W.    HALSEY    &   CO. 

claim,  he  may  reject  the  same,  and  serve  notice  of  such  rejection 
upon  the  claimant,  either  by  mail  or  personally.  An  affidavit  of 
the  service  of  such  notice,  which  shall  be  prima  facie  evidence 
thereof  shall  be  filed  with  the  superintendent  of  banks.  Any  action 
upon  a  claim  so  rejected  must  be  brought  within  six  months  after 
such  service.  Claims  presented  after  the  expiration  of  the  time  fixed 
in  the  notice  to  creditors  shall  be  entitled  to  share  in  the  distribution 
only  to  the  extent  of  the  assets  in  the  hands  of  the  superintendent 
of  banks  equitably  applicable  thereto.  Upon  taking  possession  of 
the  property  and  assets  of  any  bank,  the  superintendent  of  banks 
shall  make  an  inventory  of  the  assets  of  such  bank  in  duplicate, 
one  to  be  filed  in  the  office  of  the  superintendent  of  banks,  and  one 
with  the  papers  in  said  proceeding  in  the  office  of  the  clerk  of 
the  county  in  which  the  principal  office  of  such  bank  is  located; 
upon  the  expiration  of  the  time  fixed  for  the  presentation  of  claims 
the  superintendent  of  banks  shall  make  in  duplicate  a  full  and 
complete  list  of  the  claims  presented,  including  and  specifying  such 
claims  as  have  been  rejected  by  him,  one  to  be  filed  in  the  office 
of  the  superintendent  of  banks,  and  one  with  the  papers  in  said 
proceeding  in  the  office  of  the  clerk  of  the  county  in  which  the 
principal  office  of  such  bank  is  located.  Thereafter  he  shall  make 
and  file  in  said  offices  as  above  provided  at  least  fifteen  days  before 
each  application  to  the  court  for  leave  to  declare  a  dividend  a 
supplemental  list  of  the  claims  presented  since  the  last  preceding 
list  was  filed,  including  and  specifying  such  claims  as  have  been 
rejected  by  him,  and  in  any  event  he  shall  make  and  file  as  above 
provided  such  a  list  at  least  once  every  six  months  after  the  filing 
of  the  original  list,  as  long  as  he  shall  remain  in  possession  of  the 
Inventors  ProPerty  anc^  business  of  any  such  bank.  Such  inventory  and  list 
of  assets  °^  c^aims  sna^  be  °Pen  at  all  reasonable  times  to  inspection.  The 
compensation  of  the  special  deputy  superintendents,  counsel  and 
other  employees  and  assistants,  and  all  expenses  of  supervision  and 
liquidation,  shall  be  fixed  by  the  superintendent  of  banks  and  shall 
upon  the  certificate  of  the  superintendent  of  banks  be  paid  out  of 
the  funds  of  such  bank  in  the  hands  of  the  superintendent  of  banks. 
Fees.  All  such  expenses  must  be  reported  by  the  superintendent  of  banks 
to  the  superior  court  of  the  county  where  the  principal  place  of 
business  of  such  bank  is  located  and  settled  by  such  court  upon 


BANK   ACT   OF   CALIFORNIA  93 

notice  to  such  bank.     The  moneys  collected  by  the  superintendent  Deposit  of 
of  banks  shall  be  from  time  to  time  deposited  in  one  or  more  state  funds  of  banks 
banks  of  deposit,  savings  banks  or  trust  companies,  and,  in  case  of  in  liquidation. 
the  suspension  or  insolvency  of  the  depositary,  such  deposits  shall  be 
preferred  before  all  other  deposits.     At  any  time  after  the  expira- 
tion of  the  date  fixed  for  the  presentation  of  claims  the  superior 
court  may  by  order  authorize  the  superintendent  of  banks  to  declare 
out  of  the  funds  remaining  in  his  hands  after  the  payment  of  ex- 
penses one  or  more  dividends,  and  after  the  expiration  of  one  year 
from  the  first  pubilcation  of  notice  to  creditors  he  may  declare  a 
final  dividend,  such  dividends  to  be  paid  to  such  persons,  and  in 
such  amounts,   and  upon  such  notice,  as  may  be  directed  by  the 
superior  court  of  the  county  in  which  the  principal  office  of  such 
bank  is  located.     Objections  to  any  claim  not  rejected  by  the  super-  Court  to  rule  on 
intendent  of  banks  may  be  made  by  any  party  interested  by  filing  a  Jlst)Uieo]  claims 
copy  of  such  objections  with  the  superintendent  of  banks,  who  shall 
present  the  same  to  the  superior  court  at  the  time  of  the  next  appli- 
cation to  declare  a  dividend.     The  court  to  which  such  application 
is  made  shall  thereupon  dispose  of  said  objections  or  may  order  a 
reference  for  that  purpose,  and  should  the  objections  to  any  claim 
be  sustained  by  the  court  or  by  the  referee,  such  claim  shall  not  be 
allowed  by  the  superintendent  of  banks  until  the  claimant  shall  have 
established  his  claim  by  the  judgment  of  a  court  of  competent  juris- 
diction.     The  court  must  make  proper  provision  for  unproved  or 
unclaimed  deposits. 

Should  any  bank  at  the  time  the  superintendent  of  banks  takes  Personal 
possession  of  its  property  and  business,  have  in  its  possession,  as  property. 
bailee  for  safekeeping  and  storage,  any  jewelry,  plate,  money,  specie, 
bullion,  stocks,  bonds,  securities,  valuable  papers  or  other  valuable 
personal  property  or  should  it  have  rented  any  vaults,  safes  or  safe 
deposit  boxes  or  any  portion  thereof  for  the  storage  of  property 
of  any  kind,  the  superintendent  of  banks  may  at  any  time  thereafter 
cause  to  be  mailed  to  the  person  claiming  to  be  or  appearing  upon 
its  books  to  be  the  owner  of  such  property,  or  the  person  in  whose 
name  the  safe,  vault  or  box  stands,  a  notice  in  writing  in  a  securely 
closed,  postpaid  registered  letter,  directed  to  such  person  at  his  post 
office  address  as  recorded  upon  its  books,  notifying  such  person  to 


94 N.    W.    HALSEY   &   CO. 

remove,  within  a  period  fixed  by  said  notice  and  not  less  than  sixty 
days  from  the  date  thereof,  all  such  personal  property  and  upon  the 
date  fixed  by  said  notice,  the  contract,  if  any,  between  such  person 
and  bank  for  the  storage  of  said  property  or  for  the  use  of  the  said 
safe,  vault  or  box  shall  cease  and  determine,  and  the  amount  of  the 
unearned  rent  or  charges,  if  any,  paid  by  such  person  shall  become 
a  debt  of  the  bank  to  said  person.  If  the  property  be  not  removed 
within  the  time  fixed  by  the  notice,  the  superintendent  of  banks  may 
make  such  disposition  of  said  property  as  the  superior  court,  upon 
application  thereto,  shall  direct.  And  the  superintendent  of  banks 
may  cause  any  safe,  vault  or  box  to  be  opened  in  his  presence  or  in 
the  presence  of  one  of  the  special  deputy  superintendents  of  banks, 
and  of  a  notary  public  not  an  officer  or  in  the  employ  of  the  bank  or 
of  the  superintendent  of  banks,  and  the  contents  thereof,  if  any,  to 
be  sealed  up  by  such  notary  public  in  a  package  upon  which  such 
notary  public  shall  distinctly  mark  the  name  and  address  of  the 
person  in  whose  name  such  safe,  vault  or  box  stands  upon  the  books 
of  the  bank  and  shall  attach  thereto  a  list  and  description  of  the 
property  therein;  and  the  package  so  sealed  and  addressed,  together 
with  the  list  and  description,  may  be  kept  by  the  superintendent  of 
banks  in  one  of  the  general  safes  or  boxes  of  the  bank  until 
delivered    to    the    person    whose    name    it    bears,    or   until    other- 

Bank  ma})  w'se  disposed  of  as  directed  by  the  court.  Whenever  any  such 
appeal  to  courts,  bank  of  whose  property  and  business  the  superintendent  of  banks  has 
taken  possession  as  aforesaid,  deems  itself  aggrieved  thereby,  it  may, 
at  any  time  within  ten  days  after  such  taking  possession,  apply  to 
the  superior  court  in  the  county  in  which  the  principal  office  of  such 
bank  is  located  to  enjoin  further  proceedings;  and  said  court,  after 
citing  the  superintendent  of  banks  to  show  cause  why  further  pro- 
ceedings should  not  be  enjoined,  and  hearing  the  allegations  and 
proofs  of  the  parties  and  determining  the  facts  may,  upon  the  merits, 
dismiss  such  application  or  enjoin  the  superintendent  of  banks  from 
further  proceedings,  and  direct  him  to  surrender  such  business  and 

Appeal  to  property  to  such  bank.     An  appeal  as  above  provided  shall  operate 

supreme  court,  as  a  stay  of  the  judgment  of  the  superior  court,  and  no  bond  need 

be  given  if  the  appeal  be  taken  by  the  superintendent  of  banks;  but 

if  the  appeal  be  taken  by  such  bank,   a   bond  shall  be  given,   as 

required  by  section  nine  hundred  forty-three  of  the  Code  of  Civil 


BANK   ACT   OF   CALIFORNIA 95 

Procedure.  Whenever  the  superintendent  of  banks  shall  have  paid  Final 
to  each  and  every  depositor  and  creditor  of  such  bank  whose  claim  liquidation. 
or  claims  as  such  creditor  or  depositor  shall  have  been  duly  proved 
and  allowed,  the  full  amount  of  such  claims,  and  shall  have  made 
proper  provision  for  unclaimed  and  unpaid  deposits  or  dividends, 
and  shall  have  paid  all  the  expenses  of  the  liquidation,  the  super- 
intendent of  banks  shall  call  a  meeting  of  the  stockholders  of  such 
bank  giving  notice  thereof  for  thirty  days  in  one  or  more  newspapers 
published  in  the  county  where  the  principal  office  of  such  bank  is 
located.  At  such  meeting  the  stockholders  shall  determine  whether 
the  superintendent  of  banks  shall  be  continued  as  liquidator  and 
shall  wind  up  the  affairs  of  such  bank,  or  whether  an  agent  or 
agents  shall  be  elected  for  that  purpose,  and  in  so  determining  the 
said  stockholders  shall  vote  by  ballot,  in  person  or  by  proxy,  each 
share  of  stock  entitling  the  holder  to  one  vote,  and  the  majority  of 
the  stock  shall  be  necessary  to  a  determination.  In  case  it  is  deter- 
mined to  continue  the  liquidation  under  the  superintendent  of  banks, 
he  shall  complete  the  liquidation  of  the  affairs  of  such  bank,  and 
after  paying  the  expenses  thereof,  shall  distribute  the  proceeds  among 
the  stockholders  in  proportion  to  the  several  holdings  of  stock  in 
such  manner  and  upon  such  notice  as  may  be  directed  by  the 
superior  court.  In  case  it  is  determined  to  appoint  an  agent  or  Stockholders 
agents  to  liquidate,  the  stockholders  shall  thereupon  select  such  agent  may  elect  agent 
or  agents  by  ballot,  a  majority  of  the  stock  present  and  voting,  in  to  liquidate. 
person  or  by  proxy,  being  necessary  to  a  choice.  Such  agent  or 
agents  shall  execute  and  file  with  the  superintendent  of  banks  a 
bond  to  the  people  of  the  state  in  such  amount,  with  such  sureties 
and  in  such  form  as  shall  be  approved  by  the  superintendent  of 
banks,  conditioned  for  the  faithful  performance  of  all  the  duties  of 
his  or  their  trust,  and  thereupon  the  superintendent  of  banks  shall 
transfer  and  deliver  to  such  agent  or  agents  all  the  undivided  and 
uncollected  or  other  assets  of  such  bank  then  remaining  in  his  hands; 
and  upon  such  transfer  and  delivery,  the  said  superintendent  of 
banks  shall  be  discharged  from  any  and  all  further  liability  to  such 
bank  and  its  creditors.  Such  agent  or  agents  shall  convert  the  assets 
coming  into  his  or  their  possession  into  cash,  and  shall  account  for 
and  make  distribution  of  the  property  of  said  bank  as  is  herein  pro- 
vided in  the  case  of  distribution  by  the  superintendent  of  banks, 


96 N.   W.    HALSEY   &   CO. 

except  that  the  expenses  thereof  shall  be  subject  to  the  direction  and 
control  of  a  court  of  record  of  competent  jurisdiction.  In  case  of 
the  death,  removal  or  refusal  to  act  of  any  such  agent  or  agents,  the 
stockholders,  on  the  same  notice,  to  be  given  by  the  superintendent 
of  banks  upon  proof  of  such  death,  removal  or  refusal  to  act  being 
filed  with  him,  and  by  the  same  vote  hereinbefore  provided,  may 
elect  a  successor,  who  shall  have  the  same  powers  and  be  subject  to 
Dividends  the  same  liabilities  and  duties  as  the  agent  originally  elected.  Divi- 
and  unclaimed  dends  and  unclaimed  deposits  remaining  unpaid  in  the  hands  of  the 
deposits,  superintendent  of  banks  for  six  months  after  the  order  for  final 
distribution  shall  be  by  him  deposited  with  the  state  treasurer  in  the 
same  manner  and  subject  to  the  same  disposition  as  provided  for 
in  section  one  thousand  two  hundred  thirty-four  of  the  Code  of  Civil 
Procedure.  The  superintendent  of  banks  may  pay  over  the  moneys 
so  held  by  him  to  the  persons  respectively  entitled  thereto  upon  being 
furnished  satisfactory  evidence  of  their  right  to  the  same.  In  cases 
of  doubt  or  conflicting  claims  he  may  require  an  order  of  the 
superior  court  authorizing  and  directing  the  payment  thereof. 

Sec.  136a.  Any  bank  which  has  ceased  to  do  a  banking  busi- 
ness whether  through  voluntary  action  on  its  part  or  through  expira- 
tion of  its  corporate  existence,  shall  immediately  liquidate  its  affairs 
and  any  unclaimed  deposits  or  dividends  shall  be  paid  into  the  state 
treasury  in  the  manner  and  for  the  purposes  provided  in  section  one 
hundred  thirty-six  of  this  act  within  six  months  after  the  date  such 
bank  ceased  to  conduct  a  banking  business,  and  in  case  the  super- 
intendent of  banks  shall  have  reason  to  conclude  that  the  liquidation 
of  such  bank  is  not  being  safely  or  expeditiously  conducted,  he  may 
take  possession  of  the  property  of  such  bank  and  liquidate  its  affairs  in 
the  same  manner  as  provided  in  section  one  hundred  thirty-six  of  this 
act.  Whenever  any  bank  of  whose  property  the  superintendent  of 
banks  has  taken  possession  as  aforesaid,  deems  itself  aggrieved 
thereby,  it  may  within  the  time  and  in  like  manner  and  effect  as 
provided  in  section  one  hundred  thirty-six  of  this  act  apply  to  the 
superior  court  to  enjoin  further  proceedings. 

Sec.  1 36fc.  In  any  action  or  proceeding  brought  under  any 
provision  of  this  act,  exclusive  original  jurisdiction  shall  be  vested  in 
the  superior  court  of  the  county  in  which  is  located  the  principal 


BANK   ACT   OF   CALIFORNIA  97 

place  of  business  of  the  bank  affected  thereby,  and  all  proceedings 
relating  to  the  same  matter,  under  any  provision  of  this  act,  includ- 
ing proceedings  for  liquidation  of  the  affairs  of  any  such  bank, 
shall  be  filed  with  and  treated  as  a  part  of  the  record  in  such 
original  proceedings,  and  all  papers  relating  to  any  such  action  or 
proceeding,  including  the  copy  of  certificate  of  appointment  of  any 
special  deputy  and  the  inventories  required  to  be  filed  in  the  matter  Inventories. 
of  any  such  liquidation,  shall  be  filed  with  and  made  a  part  of  the 
record  of  such  original  proceeding,  without  the  payment  of  any 
additional  fees  therefor,  and  in  any  such  action  no  damage  may  be 
awarded,  but  the  action  otherwise  shall  be  tried  and  determined 
according  to  the  provisions  of  the  Code  of  Civil  Procedure. 

Sec.   137.      1.     Any  bank  shall  have  the  right,  on  application  Stockholders 
of  the  stockholders  or  members  to  apply  to  the  superior  court  of  ma})  apply  to 
the   county  wherein   its  principal   place   of   business    is   situated,    to  court. 
dissolve  said  bank  in  the  manner  provided  for  in  title  six,  part  three 
of  the  Code  of  Civil  Procedure. 

2.  At  the  expiration  of  four  months  after  the  settlement  of  the  Unclaimed 
final  account  of  the  receiver  of  any  bank  appointed  prior  to  July  1,  deposits. 
1909,  any  dividends  due  depositors,  or  other  creditors,   or  stock- 
holders of  such  bank  and  remaining  unpaid  or  uncalled  for  and  in 

the  hands  of  such  receiver  may  be  paid  by  him  into  the  treasury  of 
the  county  in  which  such  bank  is  situated  which  money  shall  be  held 
in  the  treasury  of  said  county,  and  at  the  same  time  it  shall  be  the 
duty  of  such  receiver  to  furnish  to  the  county  treasurer  of  said 
county  a  list  of  names  of  all  depositors  or  other  persons  to  whom 
such  money  belongs  or  who  are  entitled  thereto  and  thereupon  such 
receiver  shall  be  entitled  to  his  discharge. 

3.  The  moneys  referred  to  in  subdivision  two  of  this   section  Hoxo  moneys 
shall  be  paid  out  on  the  order  of  the  court  appointing  such  receiver,   may  be  drawn. 

4.  All  moneys  paid  under  subdivision  two  of  this  section,  un-    When  funds 
called  for  within  five  years  after  being  paid  in,  shall  by  operation  of  escheat  to  state. 
law,  and  without  action  had,  escheat  to  the  state.     All  moneys  held 

by  any  county  treasurer  under  subdivision  two  of  this  section,  when 
such  moneys  have  escheated  to  the  state  as  hereinbefore  provided, 
shall  be  paid  by  the  county  treasurer  into  the  state  treasury,   and 


98  N.   W.    HALSEY    &   CO. 

thereafter  only  be  drawn  out  in  such  manner  as  may  be  provided  for 
by  law  for  the  estates  of  deceased  persons  escheated  to  this  state. 

Investment.  5.  The  state  board  of  control  must  invest  such  moneys  in  the 
same  manner  that  the  state  school  land  fund  is  invested  as  provided 
by  law.  But  any  claimant  shall  be  entitled  to  recover  as  herein 
provided  only  the  principal  so  paid  into  the  state  treasury. 

Penalty  for        Sec.   1 38.     If  any  bank  shall  fail  to  make  any  report  required 

delaying  or  by   the  provisions  of   section  one  hundred  thirty   or   one   hundred 

■withholding  thirty  a  of  this  act,  within  ten  days  from  the  day  designated  for  the 

reports,   making  thereof  by  the  superintendent  of  banks,  or  to  include  therein 

any  matter  required  by  the  provisions  of  either  of  said  sections,  it 

shall   forfeit  to  the  people  of  the  state  the  sum  of  one  hundred 

dollars  for  each  day  that  any  such  report  shall  be  so  delayed  or 

withheld  by  the  failure  or  neglect  of  such  bank.     In  the  event  of  the 

failure  of  any  such  bank  to  make  any  such  report  required  from  it, 

the  superintendent  of  banks  may,  in  his  discretion,  immediately  cause 

the  books,  papers  and  affairs  of  such  bank  to  be  examined  at  the 

expense  of  such  bank. 

Examination  Sec.  139.  It  shall  be  the  duty  of  the  board  of  directors  of 
of  condition  every  bank  to  examine  fully  into  the  books,  papers  and  affairs  of 
of  bank  by  the  bank  of  which  they  are  directors,  and  particularly  into  the  loans 
directors,  and  discounts  thereof,  with  a  special  view  to  ascertaining  the  value 
and  security  thereof,  and  of  the  collateral  security,  if  any  given,  in 
connection  therewith,  and  into  such  other  matters  as  the  superin- 
tendent of  banks  may  require;  such  examination  to  be  made  at  least 
once  a  year,  but  no  such  subsequent  yearly  examinations  shall  be 
made  within  three  months  of  the  next  preceding  examination.  Such 
directors  shall  have  power  to  employ  such  assistance  in  making  such 
examinations  as  they  may  deem  necessary.  Within  ten  days  after 
the  completion  of  such  examination,  a  report  in  writing  thereof, 
sworn  to  by  the  directors  making  the  same,  shall  be  made  by  the 
board  of  directors  of  such  bank,  and  placed  on  file  with  the  records 
of  said  bank,  and  shall  be  subject  to  examination  by  the  superin- 
tendent of  banks.  Such  report  shall  particularly  contain  a  statement 
of  the  assets  and  liabilities  of  the  bank  examined,  as  shown  by  its 
books,  together  with  any  deductions  from  the  assets,  or  additions  to 
liabilities,  which  such  directors  or  committee,  after  such  examination. 


BANK  ACT   OF   CALIFORNIA  99 

may  determine  to  make.  It  shall  also  contain  a  statement,  in  detail,  Repoff  0t 
of  loans,  if  any,  which  in  their  opinion  are  worthless  or  doubtful,  examinations. 
together  with  their  reasons  for  so  regarding  them;  also  a  statement 
of  loans  made  on  collateral  security,  which  in  their  opinion  are  in- 
sufficiently secured,  giving  in  each  case  the  amount  of  the  loan,  the 
name  and  market  value  of  the  collateral,  if  it  has  any  market  value, 
and,  if  not,  a  statement  of  that  fact,  and  its  actual  value  as  nearly 
as  possible.  Such  report  shall  also  contain  a  statement  of  over- 
drafts, of  the  names  and  amounts  of  such  as  they  consider  worthless 
or  doubtful,  and  a  full  statement  of  such  other  matters  as  affect  the 
solvency  and  soundness  of  the  bank.  If  the  directors  of  such  bank 
shall  fail  to  make  such  examination  or  fail  to  cause  it  to  be  made,  or 
shall  fail  to  file  such  report  of  such  examination  in  the  manner  and 
within  the  time  specified,  the  superintendent  of  banks  shall  have 
authority  to  make  or  cause  to  be  made  an  extra  examination  of  such 
bank  at  the  expense  of  such  bank. 

Sec.   1 40.     The  superintendent  of  banks  shall  report  during  the  f?et)ori  0* 
month  of  October  of  each  year,  to  the  governor,  for  submission  to  sut)erinienclenl 
the  next  ensuing  session  of  the  legislature:  ^Q  QoVernor 

1 .  A  summary  of  the  state  and  condition  of  every  bank  required  Summary  of 
to  report  to  him,  and  from  which  reports  have  been  received  the  conditiom. 
preceding  year,  with  an  abstract  of  the  whole  amount  of  capital 
returned  by  them,  the  whole  amount  of  their  debts  and  liabilities, 
and  the  total  amount  of  means  and  resources,  specifying  the  amount 
of  specie  held  by  them  at  the  time  of  the  last  report  to  him,  and 
such  other  information  in  relation  to  such  banks  as,  in  his  judgment, 
may  be  useful. 

2.  A  statement  of  all  banks  authorized  by  him  to  do  business  jyeJi>  oanksm 
during  the  previous  year,  with  their  names  and  locations  and  dates 
of  incorporation,   and  particularly   designating  such   as  have   com- 
menced business  during  the  year. 

3.  A  statement  of  the  banks  whose  business  has  been   closed  ^,       , ,     , 
j    .       .  Llosed  banks. 
during  the  year. 

4.  Any  amendments  to  the  banking  law,  which,  in  his  judgment,  j        ,        . 
may  be  desirable. 


100 N.    W.    HAL5EY    &   CO. 

Pay  roll.  5.  The  names  and  compensation  of  all  persons  employed  by 
him,  and  the  whole  amount  of  the  receipts  and  expenses  of  the 
department  during  the  year. 

Bank  m       6.    The    names   of   banks   placed    in   his   hands    in   process    of 
liquidation,  liquidation,  and  the  amount  of  dividends  paid  thereon. 

Printing  of       Such  report,  and  the  usual  number  of  copies  for  the  use  of  the 

report,  legislature,  shall  be  printed  and  in  readiness  for  distribution  by  the 

state  printer,  and  one  thousand  copies  shall  be  printed  for  the  use 

of  the  department,   the  expense  of  which  shall  be  charged  among 

the  general  expenses  of  the  department. 

Information  in       Sec.    141.      1 .    The  superintendent  of  banks  shall  keep  in  his 

superintendent's  office,  in  a  place  accessible  to  the  general  public,  a  bulletin  board 

office  for  upon  which  he  shall  cause  to  be  posted  at  noon  on  Friday  of  each 

public,  week  a  detailed  statement,  signed  by  him  or,  in  case  of  his  absence 

from  San  Francisco  or  inability  to  act,  by  the  deputy  superintendent 

in  charge,   giving  the   following  items  of  general   information   with 

regard  to  the  work  of  the  department  since  the  preceding  statement: 

List  of        (a)    The   name   of   every   bank   that   has    filed    in   the   banking 
applications,  department  an  application  for  authorization  to  commence  business, 
its  location  and  the  date  of  filing  of  such  application. 

Authorized        (b)   The  name  and  location  of  every  bank  authorized  by   the 
banks,  superintendent  of  banks  to  commence  business,  its  capital,  surplus, 
and  the  date  of  authorization. 

Banks  refused        (c)    The  name  of  every  bank  to  which  a  certificate  of  authoriza- 
authorization.  tion  has  been  refused  by  the  superintendent  of  banks,  and  the  date 
of  notice  of  refusal. 

Names  of        (d)   The  name  and  residence  of  every  person  appointed  by  the 

employees,  superintendent  of  banks  as  a  deputy,  examiner  or  employee  in  the 

banking  department,  the  title  of  the  office  to  which  appointed,  the 
compensation  paid,  and  the  date  of  appointment. 

Calls  for        (e)     The  date  on  wmcn  a  ca^  f°r  a  report  by  banks  was  issued 
reports,  by  the  superintendent  of  banks,  and  the  day  designated  as  the  day 
with  reference  to  which  such  report  should  be  made. 

Liquidated        (/)    The  name  and  location  of  every  bank  whose  creditors  or 
banks,  depositors  have  been  paid  in  full  by  the  superintendent  of  banks  and 


BANK   ACT   OF   CALIFORNIA  101 

a  meeting  of  whose  stockholders  shall  have  been  called,  together 
with  date  of  notice  of  meeting  and  date  of  meeting. 

(g)  The  name  and  location  of  every  bank  subject  to  the  banking 
law  whose  affairs  and  business  shall  have  been  finally  liquidated,  or 
in  course  of  liquidation. 

(/i)      The  name  and  location  of  every  bank  which  has  applied  Change  of  names 
for  approval  of  a  change  of  name,  and  the  name  proposed.  °f  hanks. 

2.    Every  such  bulletin,  after  having  been  posted  as  aforesaid  for  Bulletins  filed. 
one  week,  shall  be  placed  on  a  file  for  such  statements,  to  be  kept 
in  the  office  of  the  superintendent  of  banks.     All  such  statements 
shall  be  public  documents,  and  at  all  reasonable  times  shall  be  open 
to  public  inspection  during  usual  banking  hours. 

Sec.  1 42.     Every  official  report  made  by  the  superintendent  and  Reports  of 
every  report  duly  verified  of  an  examination  made,  shall  be  prima  superintendent 
facie  evidence  of  the  facts  therein  stated,  for  all  purposes  in  any  available  as 
action  or  proceeding  wherein  such  bank  is  a  party.  evidence  in  court 

Section  one  hundred  forty-three  repealed  1913. 

Sec.    1 44.     Whenever  by  the  terms  of  this   act  a  penalty  or  Penalties  and 
forfeiture   is   imposed,    the   same   shall   be   recovered    in   an    action  forfeitures. 
brought  at  the  request  of  the  superintendent  of  banks  by  the  attorney 
general,    in    the   name   of    the   people   of    the   state,    and    the    sum 
recovered  shall  be  paid  into  the  state  banking  fund   and  used  in 
payment  of  claims  against  the  said  fund. 

Sec.  145.  The  powers,  privileges,  duties  and  restrictions  con-  Articles  of 
ferred  and  imposed  upon  any  corporation  or  individual  existing  and  incorporation. 
doing  business  under  the  laws  of  this  state  are  hereby  abridged, 
enlarged  or  modified  as  each  particular  case  may  require  to  conform 
to  the  provisions  of  this  act,  notwithstanding  anything  to  the  con- 
trary in  their  respective  articles  of  incorporation  or  charters.  All 
the  provisions  of  this  act  shall  apply  with  equal  force  and  effect  to 
all  corporations  which  are  now  doing  or  which  may  hereafter  do  a 
banking  business  in  this  state,  except  where  express  exception  or 
exemption  may  be  made  herein.  The  legality  of  investments 
heretofore  made,  or  title  to  property  heretofore  acquired 


102  N.    W.    HALSEY   &   CO. 

or  conveyed  through  transactions  heretofore  had  by  any 
bank  pursuant  to  any  provision  of  law  in  force  when  such 
investments  were  made  or  transactions  had,  shall  not  be 
affected  by   the  provisions   of  this   act,   except   that   any 
such  investments  made  prior  to  July   1,   1909,  when  not 
complying  with  the  provisions   hereof,   shall  be   changed 
to    conform    hereto;     but    such    change    shall    be    made 
gradually    and    in    such    manner    as    to    prevent    loss    or 
Changes  of  embarrassment  in  the  business  of  such  bank,  or  unnec- 
investments  essary  loss  or  injury  to  the  borrowers  on  such  security; 
to  conform  pro\,iJeJt  further,  that  in  any  event,  all  investments  and  securities 
ma})  be   an(j  excess  m  investments  made  prior  to  July   1 ,    1 909,  which  are 
gradual.   noj  jn  C0nfOrmity  with  the  provisions  and  spirit  of  this  act  and  which 
have  been  acquired  and  are  now  held  by  any  bank,  must  be  written 
off  as  assets  of  such  bank  prior  to  July    1,    1918;   and  no  bank 
holding  any  such  investments  or  securities  acquired  prior  to  July  1, 
1 909,  shall  after  July  1 ,  1 9 1 8,  be  permitted  to  pay  any  dividends 
to   its   stockholders   until    it   shall   have   written    off    all    such    non- 
conforming investments  or  securities;  and  provided,  further,  that  the 
legality  of  any  investments  heretofore  lawfully  made,  pursuant  to 
the  provisions  of  this  act  as  it  existed  on  and  subsequent  to  July  1, 
1909,  shall  not  be  affected  by  the  provisions  of  this  section. 

Sec.  1 46.     All  acts,  or  parts  of  acts,  in  conflict  with  this  act  are 
hereby  repealed. 

SEC.  147.     This  act  shall  take  effect  July  1st,  1909. 


Public  Deposit  Acts  of  California 

STATE  DEPOSIT  ACT 
An  Act  to  Amend  Section  Three  of  an  Act  Entitled 
"An   Act    to   Authorize   the    Deposit    of    State 
Moneys  in  Banks  in  This  State,  and  to  Repeal 
All  Acts  and  Parts  of  Acts  in  Conflict  With 
This    Act,"    Approved    February    28,    1907,    and 
Amended  by  an  Act  Approved  March  24,   1911. 
[Amended  by  act  approved  April  30,  1913.] 
The  people  of  the  State  of  California  do  enact  as  follows: 

SECTION  1 .     All  moneys  under  the  control  of  the  state  treasurer,  £)epQS\i  0f 
belonging  to  the  state,  may  be  deposited  by  the  state  treasurer  to  staie  moneys 
the  credit  of  the  state  in  such  state  or  national  bank,  or  banks,  in  m  £anLs 
the  state,  as  the  treasurer,  with  the  approval  of  the  governor  and 
state  controller,  shall  select  for  the  safe-keeping  of  such  deposits, 
and  any  sum  so  deposited  shall  be  deemed  to  be  in  the  state  treasury; 
provided  that  the  bank  or  banks  in  which  such  money  is  deposited 
shall  furnish  security  as  hereinafter  provided;    and  provided  further.  Security. 
that  such  depositary  bank  or  banks  be  selected  from  those  agreeing 
to  pay  the  highest  rate  of  interest,  not  less  than  two  per  cent  per   ,  .       . 
annum,   for  such  deposits,   as   may  be  determined   by   bids   to  be 
submitted  at  such  times  and  in  such  manner,  as  the  treasurer,  with 
the  approval  of  the  governor  and  the  state  controller  shall  direct; 
provided,  that  not  more  than  one  tenth  of  the  aggregate  amount  of 
state  moneys  available  for  deposit  and  on  deposit  shall  be  deposited  Amount  to  be 
in  any  one  bank;    and,  provided  further,  that  such  deposit  shall  not  deposited. 
exceed  fifty  per  cent  of  the  paid-up  capital,   exclusive  of   reserve 
and  surplus,  of  any  depositary  bank.     Any  and  all  bids  may  be 
rejected  by  the  treasurer,   with  the   approval  of  the  governor  and 

state  controller,  and  new  bids  asked  for.     The  expense  of   trans-  r-  , 

r  i  t         i  i     i        •     •  Expense  of 

portation  or  moneys  to  and  from  the  state  treasury  to  such  depositaries  . 

lull  i  ii        •     •  o  •  i    i        •  •  i     •  transporting 

shall   be   borne  by  such  depositaries,      oaid   deposits,   with   interest 

thereon,  shall  be  subject  to  withdrawal  at  any  time  upon  the  demand 

of  the  state  treasurer,  unless  the  treasurer,  with  the  consent  of  the 


104 N.    W.    HALSEY   &   CO. 

governor  and  controller,  shall  deposit  any  part  of  such  moneys  upon 
Term  of  different  terms;    provided  that  no  agreement  for  the  deposit  of  said 
deposit,  money  shall  be  for  a  longer  period  than  one  year. 

Interest,  when  Sec.  2.  The  interest  to  be  paid  by  any  such  depositary  bank 
payable.  snaU  be  on  me  average  daily  balances  of  the  state  moneys  kept  on 
deposit  therewith,  and  shall  be  paid  and  credited  to  the  state 
monthly  on  the  first  day  of  each  and  every  month,  and  such 
interest  shall  accrue  to  the  general  fund  of  the  state  treasury; 
School  moneys.  Provided  that  if  any  moneys  belonging  to  the  state  school  fund  or 
the  state  school  land  fund  shall  at  any  time  be  deposited  under  the 
provisions  of  this  act,  the  interest  received  thereon  shall  be  paid 
into  the  state  school  fund. 

Section  three  of  this  act  is  hereby  amended  to  read  as  follows: 

Security)  Sec.  3.  For  the  security  of  the  funds  deposited  by  the 
of  funds  state  treasurer  under  the  provisions  of  this  act,  there  shall 
deposited,  be  deposited  with  the  treasurer  bonds  of  the  United  States, 
or  of  this  state  of  any  county,  municipality,  school  district 
or  irrigation  district  within  this  state,  which  bonds  shall  be 
approved  by  the  governor,  controller  and  treasurer,  to  an 
amount  in  value  at  least  ten  per  cent  in  excess  of  the 
amount  of  the  deposit  with  such  bank  or  banks;  and  if  in 
any  case,  or  at  any  time,  such  bonds  are  not  deemed  satis- 
factory security  to  the  governor,  controller  and  treasurer, 
they  may  require  such  additional  security  as  may  be  satis- 
factory to  them.  Said  bonds,  or  any  part  thereof,  may  be 
withdrawn  on  the  written  consent  of  the  governor,  con- 
troller and  treasurer;  provided,  that  a  sufficient  amount  of 
said  bonds  to  secure  said  deposits  shall  always  be  kept  in 
the  treasury;  and  in  the  event  that  said  bank  or  banks  of 
deposit  shall  fail  to  pay  such  deposits,  or  any  part  thereof, 
on  the  demand  of  the  state  treasurer,  then  it  shall  be  the 
duty  of  the  state  treasurer  to  forthwith  convert  said  bonds 
into  money  and  to  disburse  the  same  according  to  law. 

Provisions        Sec.  4.     The  treasurer  shall  take  from  such  depositary  or  depos- 

of  contract,    itaries  a  written  contract,  in  duplicate  setting  forth  the  conditions  and 

terms  upon  which  the  funds  of  the  state  are  deposited  therewith, 

one  of  which  shall  be  filed  with  the  controller.     One  provision  of 


PUBLIC    DEPOSIT   ACTS    OF   CALIFORNIA 105 

said  contract  shall  be  that  each  depositary  shall  at  the  end  of  each 
month  render  to  the  treasurer  a  statement  in  duplicate  showing  the 
daily  balances  or  amount  of  money  of  the  state  held  by  it  during 
the  month   and   the   amount  of   the  accrued   interest   thereon   sepa- 
rately, one  of  which  shall  be  filed  by  the  treasurer  with  the  con- 
troller.    The  treasurer  shall  annually  on  the  first  day  of  Treasurer's 
July  furnish  each  depositary  bank  with  a  statement  show-  annual  statement 
ing  the  amount  and  description  of  the  bonds  on  deposit  i°  banks. 
with  him  by  such  bank  to  secure  state  deposits. 

Sec.  5.  The  treasurer,  with  the  approval  of  the  governor  'ndemniiD 
and  controller,  shall,  if  in  his  judgment  it  shall  appear  6on"s- 
necessary  for  the  security  of  the  state,  require  said  banks 
of  deposit  to  give  an  indemnity  bond,  the  sureties  on 
which  shall  not  be  interested  as  stockholders  in  said  bank 
or  banks,  to  be  approved  by  the  governor,  controller  and 
treasurer,  to  secure  the  state  against  loss  by  any  depre- 
ciation in  value  that  may  occur  in  such  bonds  held  by 
him  as  security  for  the  safe-keeping  and  prompt  payment 
of  the  state  moneys  in  such  depositaries. 

Sec.   6.     The  state  treasurer  shall  not  be  responsible  for  any  *  insurer  not 
moneys  deposited  in  a  bank  or  in  banks   under  the  provisions   of  responsible 
this   act   while   the   same    remain   there    deposited   with  the   consent  f°r  deposits. 
of  the  governor  and  controller;    but  the  treasurer  shall  be  charge- 
able  with   the   safekeeping,    management   and    disbursement   of   the 
bonds   and   certificates   of   deposit  deposited  with   him    as   security 
for  deposits   of   State  moneys,   and  with  the  interest   thereon,   and 
the  proceeds  of  any  sale  under  the  provisions  of  this  act. 

Sec.   7.     At  the  time  of  depositing  state  moneys  in  any  bank,  *  reasurer  s 
designated  as  a  depositary,  the  state  treasurer  shall  take  and  preserve  receiP'- 
a  receipt  therefor,  stating  the  amount  deposited  and  referring  to  the 
contract  made  between  the  depositary  banks  and  the  treasurer.     The 
moneys  so  deposited  may  be  drawn  out  by  the  check  or  order  of 
the  state  treasurer. 

Sec.  8.     The  act  of  March  20,    1905,  entitled  "An  act  to  Act  of  1905 
authorize  the  deposit  of  state  moneys  in  banks   in  this  state,   and  repealed. 
to  repeal  all  acts  or  parts  of  acts  in  conflict  with  this  act,"   and 
all  other  acts  or  parts  of  acts  in  conflict  with  this  act  are  hereby 
expressly  repealed. 


106 N.    W.    HALSEY    &   CO. 


COUNTY  AND  MUNICIPAL  DEPOSIT  ACT 

An  Act  to  Amend  Section  One  of  an  Act  Entitled 
"An  Act  to  Provide  for  and  Regulate  the  Deposit 
of  County  and  Municipal  Moneys  in  Banks  and 
Banking  Corporations,  Limiting  the  Amount  of 
Public  Moneys  That  May  Be  Deposited  Therein, 
and  Providing  a  Penalty  for  the  Illegal  Deposit 
and  Use  Thereof,"  Approved  March  23,  1907. 
[Amended  by  act  approved  April  30,  1913.] 

The  people  of  the  Stale  of  California  do  enact  as  follows: 

Section  one  of  this  act  is  hereby  amended  to  read  as  follows: 

Deposit  of      Section    1 .     All   moneys   belonging   to  any   county   or 
public  moneys,  municipality  within  the   state  may  be   deposited  by   any 
other  than  state,  officer   of   such   county  or   municipality   having   the   legal 
in  banks,  custody  of  such  county  or  municipal  funds  in  any  licensed 
national  bank  or  banks  within  this  state,  or  in  any  bank, 
banks   or   corporations   authorized   and   licensed   to   do    a 
banking  business   and  organized  under   the  laws   of   this 
state;    provided,   that  such  bank  or  banks  in  which  such 
Security  moneys  are  deposited  shall  furnish  as  security  for  such 
required,  deposits  bonds  of  the  United  States,  or  of  this  state,  or  of 
any  county,  municipality,  school  district,  or  irrigation  dis- 
trict within  this  state,  approved  by  the  officer  making  the 
deposit  and  the   district  attorney  for  the  county  or  city 
attorney  for  the  municipality  to  which  the  deposit  belongs. 
The  market  value  of  the  bonds  furnished  shall  be  at  least 
ten  per  cent  in  excess  of  the  amount  of  the  deposit  secured 
thereby;    but  the  amount  of  the  deposit  shall  in  no  case 
exceed  the  face  value  of  the  bonds  furnished  as  security 
therefor;    and  provided,  that  such  bank  or  banks  shall  pay 
a  reasonable  rate  of  interest,  not  less  than  two  per  cent 
per  annum,  on  the  daily  balances  therein  deposited. 

Rate  of        Sec.  2.     The  rate  of  interest  shall  be  fixed  annually  as  herein 

interest  to  be  provided  in  the  month  of  January  of  each  year  on  all  deposits  to 

fixed, when,   be  made  for  such  year;    provided,  that  the  rate  of  interest  for  the 

year  ending  December  31st,    1907,  may  be  fixed  as  herein  pro- 


PUBLIC   DEPOSIT   ACTS   OF   CALIFORNIA  rf07 


vided  within  ninety  days  after  this  act  goes  into  effect.  The  rate 
of  interest  shall  be  fixed  in  the  case  of  counties,  by  the  treasurer, 
auditor,  and  chairman  of  the  board  of  supervisors,  and  in  the  case 
of  municipalities  by  the  treasurer,  auditor,  (or  clerk  of  munici- 
palities having  no  auditor)  and  chairman  of  the  council  or  other 
governing  body  of  such  municipality.  Said  rate  of  interest  shall 
be  a  reasonable  rate  and  not  less  than  two  per  cent  per  annum  Minimum  rale. 
on  the  daily  balances  deposited;  and  the  rate  of  interest  so  estab- 
lished for  each  year  as  herein  provided,  shall  be  the  uniform  rate 
of  interest  required  from  all  banks  receiving  deposits  from  the 
county  or  municipality,  for  that  year. 

Interest  on   all   moneys   deposited   as  herein  provided   for   shall  Interest,  when 
belong    to    the   county    or   municipality   represented    by    the    officer  payable. 
making  such  deposit  and  shall  be  paid  quarterly  into  the  general 
fund  of  such  county  or  municipality  except  where  the  law  other- 
wise directs. 

Sec.  3.  It  shall  be  the  duty  of  the  officer  making  the  deposit,  Receipt  for 
to  receive  from  the  bank  in  which  the  deposit  is  made,  a  receipt  deposit. 
or  receipts  in  duplicate  showing  the  date  and  amount  of  deposit 
and  rate  of  interest  to  be  paid  thereon,  one  copy  of  which 
said  officer  shall  keep  on  file  in  his  office  and  he  shall  file  one  copy 
with  the  auditor  of  the  county  or  auditor  of  the  municipality  (or 
clerk  in  municipalities  having  no  auditor)  as  the  case  may  be. 

Sec.  4.     Every  treasurer  shall  keep  a  record  in  his  office  which  Record  of 
shall  be  open  to  public  inspection,  showing  at  all  times  the  amount  deposits. 
of  money  on  deposit  and  all  banks  in  which  the  same  is  deposited, 
and  dates  of  deposit.    Also  a  record  of  all  banks  making  application 
for  the  deposit  of  the  public  funds. 

Sec.  5.     The  total  amount  of  public  moneys  on  deposit  in  any  Amount  that 
bank,  shall  not  at  any  one  time  exceed  fifty  per  cent  of  the  paid-up  maV  be 
capital  stock  of  such  depositary  bank  or  banks.      No  officer  shall  deposited. 
have  on  deposit  at  any  one  time  more  than  ten  per  cent  of  the 
public  moneys  under  his  control  and  available  for  deposit  in  any 
bank  while  there  are  other  qualified  banks  requesting  such  deposits; 
provided,  that  no  treasurer  of  a  county,  or  municipality,  shall  be 
required  to  deposit  public  moneys  in  any  bank  outside  of  the  county 
owning  the  money  or  in  which  the  municipality  is  situated. 


108 N.    W.    HALSEY    &   CO. 

Receipts  to  be       Sec.    6.     The   receipt  issued  by  any  bank   for   deposits  made 

counted  as  cash,  therein,  together  with  the  bonds  held  as  security  therefor,  shall  be 

held  by   the  treasurer  making  the  deposit   and  be  recognized   and 

counted  as  cash  to  the  amount  recited  in  the  receipt  by  the  officers 

required  by  law  to  count  the  same. 

On  failure  of  Sec.  8.  Should  any  bank  fail  to  pay  any  public  moneys 
banks  to  repay,  held  on  deposit  as  herein  provided,  the  officer  making  such 
security  to  deposit  may,  after  ten  days'  written  notice  to  such  bank, 
to  sold,  proceed  to  sell  at  public  or  private  sale,  such  of  the  bonds 
held  by  him  as  security  as  he  may  see  fit;  provided, 
however,  that  he  shall  sell  no  bonds  for  less  than  their 
face  value  except  at  public  sale  after  ten  days'  printed 
notice  in  some  newspaper  of  general  circulation  published 
in  the  county  where  the  sale  is  to  take  place.  The  pro- 
ceeds of  such  sale,  after  paying  all  expenses,  shall  be 
credited  to  the  account  of  the  bank  which  deposited  the 
bonds  as  collateral.  Any  bank  failing  to  make  payment, 
may,  at  any  time  before  the  sale  of  the  bonds  is  com- 
pleted, stop  such  sale  by  repaying  all  the  moneys  deposited 
with  it,  together  with  any  expense  that  may  have  been 
incurred  by  the  officer  making  such  deposit,  as  the  result 
of  such  failure.  Should  the  proceeds  of  any  such  sale  fail  to 
fully  repay  any  deposit,  the  balance  remaining  unpaid  may 
be  collected  in  an  action  of  law  in  the  name  of  the  officer 
making  the  deposit. 

Public  officials  Sec.  9.  Public  officials  shall  not  be  responsible  for  any  loss  of 
not  responsible  public  moneys  resulting  from  the  deposit  thereof  when  made  in 
for  loss,  accordance  with  the  provisions  of  this  act.  It  shall  be  the  duty 
of  the  officer  making  the  deposit  to  safely  keep  all  evidence  of 
indebtedness  issued  by  banks  for  deposits  made  therein,  and  bonds 
deposited  for  security  and  such  public  officer  shall  be  responsible 
for  such  evidence  of  indebtedness,  and  for  bonds  held  as  security 
therefor,  together  with  the  interest  thereon  and  the  proceeds  of  any 
sale  of  such  bonds;  and  the  city,  county  or  municipality  for  which 
said  officer  acts,  shall  be  responsible  to  such  bank  for  the  safe 
return  of  the  securities  furnished  by  it  to  such  officer. 


PUBLIC   DEPOSIT   ACTS   OF   CALIFORNIA  109 

Sec.   10.     The  expenses  of  transportation  of  moneys  to  or  from  Transportation 
the  state,  county  or  municipal  treasuries  to  such  depositaries  shall  of  moneys. 
be  borne  by  such  depositaries. 

Sec.  1 1 .  The  making  of  profit  out  of  county,  city,  town  or  Violation  of  act 
other  public  moneys,  or  using  the  same  for  any  purpose  not  author-  a  felon}). 
ized  by  law  by  any  officer  having  possession  or  control  thereof, 
shall  be  a  felony.  Any  violation  of  the  provisions  of  this  act  by 
a  bank  or  a  banking  corporation,  shall  be  punishable  by  a  fine  not 
exceeding  five  hundred  dollars  for  each  offense,  and  the  officers 
of  such  bank  or  banking  corporation  and  officer  receiving  such 
deposit  shall  be  guilty  of  a  felony. 

Sec.  1 2.  Nothing  in  this  act  contained  shall  prevent  any  Present  laws 
county  or  municipality  within  this  state  from  buying  not  abrogated. 
bonds  or  otherwise  investing  its  money  in  any  manner 
now  provided  by  law  and  nothing  herein  contained  as  to 
the  disposition  of  interest  on  public  moneys  deposited  shall 
apply  to  any  money  received  or  held  by  any  county  or 
municipality  wherein  any  law  provides  for  the  payment 
of  interest  or  profit  thereon,  into  any  particular  fund. 

Sec.   1 3.     All  acts  or  parts  of  acts  in  conflict  with  this  act  are 
hereby  repealed. 

Sec.   14.     This  act  shall  take  effect  immediately. 


Investment  Companies  Act. 


An  Act  to  Define  Investment  Companies,  Investment 
Brokers,  and  Agents;  to  Provide  for  the  Regu- 
lation, Supervision  and  Licensing  Thereof;  to 
Provide  Penalties  for  the  Violation  Thereof; 
to  Create  the  Office  of  Commissioner  of  Corpora- 
tions, and  Making  an  Appropiation  Therefor. 

The  people  of  the  State  of  California  do  enact  as  follows: 

SECTION     I.     This    act    shall    be    known    as    the    "investment  ^cj 
companies   act." 

Sec.  2.      (a)   The  term  "investment  company,"  when  used  in  Definition  of 
this  act,  includes  every  private  corporation,   association,  co-partner-  "Investment 
ship  and  company,  which  shall  within  this  state,  sell,  offer  for  sale.  Company." 
negotiate  for  the  sale  of  or  take  subscriptions  for  any  stock,  stock 
certificate,  bond  or  other  evidence  of  indebtedness  of  any  kind  or 
character,   issued  or  to  be  issued  by  itself,  other  than  promissory 
notes  not  offered  to  the  public  by  the  maker  thereof. 

(b)  The  term  "security,"  when  used  in  this  act,  includes  the  stock,   The  definition  of 
stock  certificates,  bonds,  and  other  evidences  of  indebtedness,  other  "Securitv  M 
than    promissory   notes    not   offered    to    the   public    by    the    maker 

thereof,  of  an  investment  company. 

(c)  The  term  "investment  broker,"  when  used  in  this  act,  Definition  0f 
includes  every  corporation,  association,  copartnership,  company  and  "Jnvestment 
person  who  shall  within  this  state  regularly  engage  in  the  business  UtqU^  ** 

of  selling,  offering  for  sale  or  negotiating  for  the  sale,  as  agent  or 
contractor,  of  any  security  of  more  than  one  investment  company. 
The  term  "contractor"  means  any  one  who  undertakes  to  sell 
securities  for  an  investment  company  for  a  commission  or  other 
consideration. 

(d)  The  term  "agent,"  when  used  in  this  act,   includes  every  ^  ,  ...        , 
.  .    .  ,.  .      Definition  of 

corporation,    association,    copartnership,    company    and   person    who  **Aa    , »» 

shall  within  this  state  sell,  offer  for  sale,  negotiate  for  the  sale  of 


112  N.    W.    HALSEY    &   CO. 

or  take  subscriptions  for  any  security  of  an  investment  company, 
either  as  an  employee  on  a  salary  basis  or  for  a  commission,  if 
acting  either  for  the  investment  company  or  an  investment  broker. 

"Sale."  (e)  The  term  "sale,"  when  used  in  this  act,  means  the  original 
transfer  of  title  of  its  own  securities  from  an  investment  company 
for  any  valuable  consideration. 

Exemptions       Sec.   3.      This  act  shall  not  apply  to  corporations,  associations, 
from  the  copartnerships,   companies,    firms   and   individuals   now   or   hereafter 
application  subject  to  the  jurisdiction  or  authority  of  the  railroad  commission, 
of  this  act.  nor    to    corporations,    associations,    copartnerships,    companies,    firms 
and    individuals    after   they   have   secured    from    the   state   banking 
department,   the  insurance   commissioner  or  the  bureau  of  building 
and  loan  supervision  a  certificate  of  authority  or  license  to  do  busi- 
ness within  this  state,  nor  to  corporations,  associations,  copartnerships 
or   companies,    subject   to   federal    regulation   or   not   organized    for 
profit,  nor  to  mutual  water  companies  and  irrigation  districts,  nor  to 
the  stocks,  stock  certificates,  bonds  or  other  evidences  of  indebted- 
ness  of   such    corporations,    associations,    copartnerships,    companies, 
firms  or  individuals. 

Application  Sec.  4.  (a)  Before  selling,  offering  for  sale,  negotiating  for 
for  permission,  the  sale,  or  taking  subscriptions  for,  any  security  of  any  kind  or 
character,  each  investment  company  shall  file  in  the  office  of  the 
commissioner  of  corporations  of  this  state,  an  application  for 
permission  so  to  do,  together  with  a  filing  fee,  as  hereinafter 
prescribed,  an  itemized  statement  of  its  financial  condition,  in  such 
form  and  detail  as  the  commissioner  of  corporations  may  prescribe, 
a  copy  of  all  contracts  which  it  proposes  to  make  with  or  sell  to 
the  public,  a  certified  copy  of  its  charter,  articles  of  incorporation 
or  articles  of  association  and  all  amendments  thereto,  and  such 
additional  information  pertaining  thereto  as  the  commissioner  of 
Filing  fee.  corporations  may,  from  time  to  time,  prescribe.  Said  filing  fee 
shall  be  five  dollars  if  the  par  or  face  value  of  said  security  amounts 
to  twenty-five  thousand  dollars  or  less;  ten  dollars  if  the  par  or 
face  value  of  said  security  amounts  to  over  twenty-five  thousand 
dollars  and  not  over  fifty  thousand  dollars;  fifteen  dollars  if  the 
par  or  face  value  of  said  security  amounts  to  over  fifty  thousand 
dollars  and  not  over  seventy-five  thousand  dollars;    twenty  dollars 


INVESTMENT   COMPANIES   ACT 113 

if  the  par  or  face  value  of  said  security  amounts  to  over  seventy-five 
thousand  dollars  and  not  over  one  hundred  thousand  dollars;  and 
twenty-five  dollars  if  the  par  or  face  value  of  said  security  amounts 
to  over  one  hundred  thousand  dollars. 

(b)  If  the  investment  company  does  not  desire  to  sell  its  securi-  Exemptions    of 
ties  to  the  public  the  commissioner  of  corporations  may   make  his  Investment  Co. 
written  finding  to  that  effect.     Upon  the  filing  of  said  finding  the  and  securities. 
investment    company    and    its   securities    shall   be    exempt    from    the 

provisions  of  this  act  until  the  commissioner  of  corporations  makes 
and  files  his  order  setting  aside  said  finding.  The  commissioner  of 
corporations  shall  have  power  to  make  his  order  setting  aside  said 
finding  if  he  finds  that  the  investment  company  is  selling  its  securities 
to  the  public,  or  for  other  good  cause. 

(c)  If  such  company  is  organized  or  created  under  or  by  virtue  Companies 
of  the  laws  of  any  other  state,  territory  or  government,  it  shall  also  organized  in 
file  in  the  office  of  the  commissioner  of  corporations  a  certified  copy  other  States. 
of  the  law  or  laws  under  which   it  is   organized   or   incorporated, 

and  all  amendments  thereto,  and  also,  in  such  form  as  the  commis- 
sioner of  corporations  may  prescribe,  its  written  instrument,  irre- 
vocable, appointing  the  commissioner  of  corporations  or  his  successor 
in  office  its  true  and  lawful  attorney,  upon  whom  all  process  in  any 
action  or  proceeding  against  it  may  be  served  with  the  same  effect 
as  if  said  company  were  organized  or  created  under  the  laws  of 
this  state  and  had  been  lawfully  served  with  process  therein.  Service 
upon  such  attorney  shall  be  deemed  personal  service  upon  such 
company.  The  commissioner  of  corporations  shall  forthwith  forward 
by  mail,  postage  prepaid  to  the  person  designated  by  such 
company  by  written  instrument  filed  with  the  commissioner  of 
corporations  at  the  address  given  in  said  instrument,  or,  in  case  no 
such  instrument  has  been  filed,  to  the  secretary  of  such  company  at 
its  last  known  post  office  address,  a  copy  of  every  process  served 
upon  him  under  the  provisions  of  this  section.  For  each  copy  of 
process,  the  commissioner  of  corporations  shall  collect  the  sum  of 
two  dollars,  which  shall  be  paid  by  the  plaintiff  or  moving  party 
at  the  time  of  such  service,  to  be  recovered  by  him  as  part  of  his 
taxable  costs,  if  he  succeeds  in  the  suit  or  proceedings.  Service 
shall  not  be  deemed  complete  until  said  fee  has  been  paid,  and 
said  copy  of  process  mailed  as  hereinbefore  directed. 


114  ^ N.    W.    HALSEY   &   CO. 

Examination,  Sec.  5.  It  shall  be  the  duty  of  the  commissioner  of  corpora- 
audit,  etc.,  tions  to  examine  the  statement  and  other  information  so  filed,  and 
of  investment  he  mayj  \{  ne  deems  it  advisable,  make,  or  have  made,  at  applicant's 
companies.  cost  as  hereinafter  in  this  act  specified,  a  detailed  examination, 
audit  and  investigation  of  the  investment  company's  affairs,  providing 
that  the  investment  company  may  at  its  option,  in  writing,  refuse 
to  have  such  examination,  audit  or  investigation  made,  whereupon 
the  commissioner  of  corporations  must  reject  the  application.  If  he 
Certificate  finds  that  the  proposed  plan  of  business  of  the  investment  company 
of  authority,  is  not  unfair,  unjust,  or  inequitable  the  commissioner  of  corporations 
shall  issue  to  the  investment  company  a  certificate,  authorizing  it 
to  sell  securities,  as  therein  specified  within  this  state,  reciting  that 
the  company  has  complied  with  the  provisions  of  this  act,  that 
detailed  information  concerning  the  investment  company  and  its 
securities  is  on  file  in  the  office  of  the  commissioner  of  corporations 
and  that  the  investment  company  is  authorized  to  sell  said  securities 
within  this  state  on  such  conditions,  if  any,  as  the  commissioner 
of  corporations  may  in  said  certificate  prescribe.  Said  certificate 
shall  recite  in  bold  type  that  the  issuance  of  this  certificate  is 
permissive  only  and  does  not  constitute  a  recommendation  or 
indorsement  of  said  securities.  The  commissioner  of  corporations 
may  impose  such  conditions  as  he  may  deem  necessary  to  the  issue 
of  said  securities,  and  may,  from  time  to  time,  for  cause,  rescind, 
alter  or  amend  the  certificate.  If  the  commissioner  of  corporations 
finds  that  the  proposed  plan  of  business  of  the  investment  company 
is  unfair,  unjust,  or  inequitable  or  that  it  does  not  intend  to  do  a 
fair  and  honest  business,  he  shall  refuse  to  issue  the  certificate  and 
shall  notify  the  investment  company  in  writing  of  his  decision.  It 
shall  be  unlawful  to  issue  any  security  to  which  this  act  is  applic- 
able unless  a  certificate  or  a  temporary  permit  authorizing  the 
issue  thereof  shall  first  have  been  secured  from  the  commissioner  of 
corporations  as  provided  in  this  act;  and  it  shall  further  be  unlawful 
for  any  investment  company,  investment  broker  or  agent  as  in  this 
act  defined,  to  sell,  offer  for  sale,  negotiate  for  the  sale  of  or 
take  subscriptions  for  any  stock,  stock  certificate,  bond  or  other 
evidence  of  indebtedness  of  any  kind  or  character  without  exhibiting 
to  the  prospective  purchaser  or  prospective  purchasers  of  such 
securities,  or  any  thereof,  a  copy  of  the  certificate  issued  to  such 


INVESTMENT   COMPANIES   ACT 115 

investment  company  in  accordance  herewith.  A  corporation  may 
without  applying  for  a  certificate  under  the  provisions  of  this  act 
issue  to  each  of  its  directors  one  share  of  stock  for  the  purpose 
of  qualifying  as  directors.  The  commissioner  of  corporations,  if 
satisfied  that  the  investment  company  intends  to  do  a  fair,  just  and 
equitable  business,  may,  forthwith  upon  the  filing  of  the  statement 
and  other  papers  required  by  section  four  of  this  act,  issue  to  said 
investment  company,  upon  such  conditions  as  he  may  prescribe,  a 
temporary  permit  to  issue  its  securities  pending  the  examination  of 
said  statement  and  other  papers,  and  may,  from  time  to  time,  for 
cause,  rescind,  alter  or  amend  said  temporary  permit. 

Sec.   6.     The  provisions  of  sections  four  and  five  of  this  act,  Issuing  of 
in  so  far  as  applicable,  shall  apply  to  investment  brokers ;    provided,  general  permit. 
that   the   commissioner   of   corporations   may,    if   he    finds   that    the 
applicant  has  a   good  business  reputation   and  deals  only   in   good 
securities,   issue  to  an  investment  broker  a  general  permit  entitling 
such  investment  broker  to  sell  securities  within  this  state,  authorized 
by  him,  until  the  first  of  March  following,  when  it  will  be  necessary 
to  secure  a  new  general  permit.     For  each  such  general  permit  the 
commissioner  of  corporations  shall  charge  the  sum  of  five  dollars. 
Such  general  permit,  however,  shall  be  subject  to  revocation  by  the  '  ermit  subject 
commissioner  of  corporations   at   any  time   for   cause   appearing   to  '°  revocation. 
him   sufficient.      The   commissioner   of   corporations    shall    forthwith 
mail  written  notice  of  such  revocation  to  the  investment  broker. 

Sec.  7.  Any  investment  company  or  investment  broker  may  Agents. 
appoint  one  or  more  agents,  but  it  shall  be  unlawful  for  any  such 
agent  to  do  any  business  as  specified  in  this  act  until  he  shall  have 
secured  from  the  commissioner  of  corporations  a  certificate  authoriz- 
ing him  to  represent  such  investment  company  or  investment  broker 
within  this  state  until  the  first  of  March  following,  when  it  will  be 
necessary  to  secure  a  new  certificate.  For  each  certificate  the 
commissioner  of  corporations  shall  charge  the  sum  of  one  dollar. 
Such  certificate,  however,  shall  be  subject  to  revocation  by  the 
commissioner  of  corporations  at  any  time  for  cause  appearing  to 
him  sufficient. 


116        N.    W.    HALSEY    &   CO. 

Investment        Sec.   8.      The  commissioner  of   corporations   shall  'have  general 

companies    supervision  and  control,   as  provided  in  this  act,  over  any   and  all 

under  control    investment  companies  and  investment  brokers,  and  all  such  investment 

of  the    companies  and  investment  brokers   shall  be  subject  to  examination 

Commissioner    by  the  commissioner  of  corporations  or  a  duly  authorized  deputy  at 

of  Corporations,    any  time  the  commissioner  of  corporations  may  deem  it  advisable  to 

have  such  examination  made  to  carry  out  any  provision  of  this  act, 

and  in  the  same  manner  and  with  the  same  powers  as  is  now,  or 

may    hereafter    be   provided    for    the    examination    of    state    banks. 

Examination    Such   investment   company  or   investment   broker   shall   pay   to   the 

fee.    commissioner  of   corporations,   for   each  examination,   a   fee   of   ten 

dollars  and  traveling  expenses  for  each  day  or  fraction  thereof  that 

he  or  his  deputy  shall  necesarily  be  absent  from  his  office  for  the 

purpose    of   making   such   examination,    and   the   failure    or   refusal 

of  any  investment  company  or  investment  broker  to  pay  such   fee 

upon  the  demand  of  the  commissioner  of  corporations  shall  work  a 

forfeiture  of  its  or  his  rights  to  sell   any   further  securities   in  this 

state  until   such   fee  shall   have  been  paid  to   the  commissioner   of 

corporations,  with  interest  at  the  rate  of  seven  per  cent   from   the 

time   of   the   demand  of   the  commissioner  of   corporations   and   an 

additional  twenty-five  per  cent  of  such  fee  by  way  of  penalty. 

Advertising.  Sec.  9.  It  shall  be  unlawful  for  any  investment  company, 
investment  broker  or  agent  to  issue,  circulate  or  deliver  any 
advertisement,  pamphlet,  prospectus,  circular  or  statement  or  other 
document  in  regard  to  securities  which  it  desires  to  sell  in  this  state 
until  after  such  investment  company,  investment  broker  or  agent 
shall  have  been  licensed  to  sell  such  securities  as  provided  in  this 
act.  It  shall  be  unlawful  for  any  such  licensed  investment  com- 
pany, investment  broker  or  agent  to  issue,  circulate  or  deliver  any 
such  advertisement,  pamphlet,  prospectus,  circular,  statement  or  other 
document,  unless  the  same  shall  be  signed  with  the  name  of  the 
investment  company  or  investment  broker  and  bear  a  serial  number 
and  a  copy  thereof  shall  first  have  been  filed  with  the  commissioner 
of  corporations.  The  commissioner  of  corporations  may  for  cause 
object  to  any  such  advertisement,  pamphlet,  prospectus,  circular, 
statement  or  other  document,  whereupon  it  shall  be  unlawful  for 
such    investment   company,    investment   broker    or   agent    to    further 


INVESTMENT   COMPANIES   ACT  117 

issue,  circulate  or  deliver  such  advertisement,  pamphlet,  prospectus, 
circular,  statement  or  other  document. 

Sec.    10.      (a)    Every  investment  company,   until   it  shall  have   Investment 
sold  all  the  securities  authorized  by  the  commissioner  of  corporations    company  must 
and  disposed  of  the  proceeds  thereof,  shall  file  in  the  office  of  the   file  a  report  of 
commissioner  of   corporations,   under   date   of    December    3 1  st   and    its  purchase 
June  30th  of  each  year,  and  within  fifteen  days  after  said  dates,    and  sales. 
and  also  at  such  other  times  as  may  be  required  by  the  commissioner 
of  corporations,  a  report  setting  forth  in  such  form  as  the  commis- 
sioner of   corporations   may  prescribe,    the   securities   authorized   by 
him  and  sold  under  the  provisions  of  this  act,  the  proceeds  derived 
therefrom,  the  disposition  of  such  proceeds  and  such  other  informa- 
tion concerning  its  affairs  relating  to  the  subject  matter  of  this  act, 
as  the  commissioner  of  corporations  may  require. 

(b)    Every   investment   broker   shall    when    called    upon    by    the   Report  of 
commissioner  of  corporations  file  in  his  office  a  report  giving  such    brokers. 
information  as  he  may  call  for,  relating  to  the  securities,  the  sale  of 
which  has  been  authorized  under  the  provisions  of  this  act. 

Sec.   1 1 .     All  papers,  documents,  reports  and  other  instruments   Reports  open 
in  writing  filed  with  the  commissioner  of  corporations  under  this  act    to  public 
shall  be  open  to  public  inspection;    provided,  that  if  in  his  judgment   inspection. 
the    public    welfare    or    the    welfare    of    any    investment    company 
demands  that  any  portion  of  such  information  be  not  made  public 
he  may  withhold  such  information  from  public  inspection  for  such 
time  as  in  his  judgment  is  necessary. 

Sec.    12.     An  appeal  may  be  taken  from  any  decision  of  the  Appeal  ma}} 
commissioner  of  corporations  under  this  act  by  filing  with  the  clerk   be  made  to 
of  the  superior  court  of  the  State  of  California,  in  and  for  the  city  superior  court. 
and  county  of  San  Francisco,  a  certified  transcript  of  all  papers  in 
the    office    of    the    commissioner    of    corporations    relating    to    such 
decision.     It  shall  be  the  duty  of  the  commissioner  of  corporations 
to  make   and   certify   to   said   transcript   upon   payment   to   him   of 
a  fee  of  ten  cents  for  each  folio  and  one  dollar  for  the  certification. 
The  court  shall  upon  such  appeal  be  limited  to  a  consideration  of 
the  question  whether  there  has  been  abuse  of  discretion  on  the  part 
of  the  commissioner  of  corporations  in  making  such  decision. 


118  N.    \V.    HALSEY    &   CO. 

Penalty)  for  Sec.  1 3.  Any  person  who  shall  knowingly  or  wilfully  sub- 
misleading  scribe  to  or  make  or  cause  to  be  made  any  false  statement  or  false' 
statements,  entry  in  any  book  of  any  investment  company  or  investment  broker, 
or  exhibit  any  false  paper  with  the  intention  of  deceiving  any 
person  authorized  to  examine  into  its  affairs,  or  who  shall  make 
or  publish  any  false  or  misleading  statement  of  its  financial  condition 
or  concerning  the  securities  by  it  offered  for  sale,  shall  be  guilty 
of  a  misdemeanor  and  shall  be  punishable  by  a  fine  not  exceeding 
one  thousand  dollars  or  by  imprisonment  in  a  county  jail  not 
exceeding  one  year  or  by  both  such  fine  and  imprisonment. 
Violations.  Sec.  14.  Any  corporation,  association,  copartnership  or  com- 
pany which  violates  or  fails  to  comply  with  any  of  the  provisions 
of  this  act,  or  which  fails,  omits  or  neglects  to  obey,  observe  or 
comply  with  any  order,  decision,  demand  or  requirement,  or  any 
part  or  provision  thereof,  of  the  commissioner  of  corporations  under 
the  provisions  of  this  act,  is  subject  to  a  penalty  of  not  less  than 
five  hundred  dollars  nor  more  than  two  thousand  dollars  for  each 
and  every  offense,  which  penalty  if  unpaid  after  demand  by  the 
commissioner  of  corporations  shall  be  recovered  in  an  action  brought 
in  the  name  of  the  people  of  the  State  of  California  by  the  attorney 
general. 
Penalties.  Sec.  15.  Every  person  who  violates  or  fails  to  comply  with 
any  of  the  provisions  of  this  act  or  who  fails,  omits  or  neglects  to 
obey,  observe  or  comply  with  any  order,  decision,  demand  or 
requirement,  or  any  part  or  provision  thereof,  of  the  commissioner 
of  corporations  under  the  provisions  of  this  act  in  any  case  in  which 
a  different  penalty  is  not  specifically  provided,  is  guilty  of  a 
misdemeanor  and  is  punishable  by  a  fine  of  not  exceeding  one 
thousand  dollars,  or  by  imprisonment  in  a  county  jail  not  exceeding 
one  year,  or  by  both  such  fine  and  imprisonment. 

Creation  of       Sec.    1 6.     There  is  hereby  created  a  state  corporation  depart- 

state  ment.     The  chief  officer  of  such  department  shall  be  the  commis- 

corporalion  sioner  of  corporations.     He  shall  be  appointed  by  the  governor  and 

department,  hold  office  at  the  pleasure  of  the   governor.      He  shall  receive  an 

Commissioner  annual  salary  of  five  thousand  dollars,  to  be  paid  monthly  out  of 

of  corporations,  the    state    treasury    upon   a   warrant   of    the   controller.      He   shall 

within  fifteen  days  from  the  time  of  notice  of  his  appointment  take 

and  subscribe  to  the  constitutional  oath  of  office  and  file  the  same 


INVESTMENT   COMPANIES   ACT 


119 


in  the  office  of  the  secretary  of  state  and  execute  to  the  people  of 
the  state  a  bond  in  the  penal  sum  of  ten  thousand  dollars  with 
corporate  security  or  two  or  more  sureties,  to  be  approved  by  the 
governor  of  the  state,  for  the  faithful  discharge  of  the  duties  of  his 
office. 

Sec.  1  7.  The  commissioner  of  corporations  shall  employ  such  Detouties 
clerks  and  deputies  as  he  may  need  to  discharge  in  proper  manner 
the  duties  imposed  upon  him  by  law.  Neither  the  commissioner  of 
corporations  nor  any  of  his  clerks  or  deputies  shall  be  interested 
in  any  investment  company,  or  investment  broker,  as  director, 
stockholder,  officer,  member,  agent  or  employee.  Such  clerks  and 
deputies  shall  perform  such  duties  as  the  commissioner  of  corpora- 
tions shall  assign  to  them.  He  shall  fix  the  compensation  of  such 
clerks  and  deputies  which  compensation  shall  be  paid  monthly  on 
the  certificate  of  the  commissioner  of  corporations,  and  on  the 
warrant  of  the  controller  out  of  the  state  treasury;  provided,  how- 
ever, that  the  total  expenditures  provided  for  in  this  act  shall  not 
exceed  fifty  thousand  dollars  per  annum.  Each  deputy  shall  within 
fifteen  days  after  his  appointment  take  and  subscribe  to  the  consti- 
tutional oath  of  office  and  file  the  same  in  the  office  of  the  secretary 
of  state. 

Sec.  18.  The  commissioner  of  corporations  shall  have  his 
office  in  the  city  of  Sacramento  and  he  shall  from  time  to  time 
obtain  the  necessary  furniture,  stationery,  fuel,  light  and  other 
proper  conveniences  for  the  transaction  of  the  business  of  the  state 
corporation  department,  the  expenses  of  which  shall  be  paid  out  of 
the  state  treasury  on  the  certificate  of  the  commissioner  of  corpora- 
tions and  the  warrant  of  the  controller. 

Sec.  19.  A  fund  is  hereby  created  to  be  known  as  the 
"corporation  commission  fund"  and  out  of  said  fund  shall  be 
paid  all  the  expenses  incurred  in  and  about  the  conduct  of  the 
business  of  the  corporation  department,  including  the  salary  of  the 
commissioner  and  his  clerks  and  deputies,  traveling  expenses, 
furnishing  rooms  and  rent.  All  moneys  collected  or  received  by 
the  commissioner  of  corporations  under  and  by  virtue  of  the 
provisions  of  this  act  shall  be  delivered  by  him  to  the  treasurer  of 
the  state,  who  shall  deposit  the  same  to  the  credit  of  said  corporation 
commission   fund.      And  all  such  fund  so  deposited  or   such  part 


Office. 


"Corporation 

commission 

fund." 


120  N.    W.    HALSEY    &   CO. 

thereof  as  may  be  necessary  for  the  purposes  of  this  act  are  hereby 
appropriated  to  the  use  of  the  corporation  commission  fund  for 
the  purposes  of  this  act.  It  shall  be  the  duty  of  the  commissioner 
of  corporations  semi-annually  to  certify  under  oath  to  the  state 
treasurer  and  secretary  of  state  the  total  amount  of  receipts  and 
expenditures  of  the  state  corporation  department  for  the  six  months 
preceding.  All  fees  and  payments  of  every  description  required 
by  this  act  to  be  paid  to  the  commissioner  of  corporations  shall  be 
paid  by  him  to  the  state  treasurer  on  the  first  day  of  each  week 
following  their  receipt  by  the  commissioner  of  corporations. 

Seal.  Sec.  20.  The  commissioner  of  corporations  shall  adopt  a  seal 
with  the  words  "Commissioner  of  Corporations,  State  of  Cali- 
fornia," and  such  other  device  as  the  commissioner  of  corporations 
may  desire  engraved  thereon  by  which  he  shall  authenticate  the 
proceedings  of  his  office.  Copies  of  all  records  and  papers  in  the 
office  of  the  corporation  department  shall  be  received  in  evidence  of 
all  cases  equally  and  with  like  effect  as  the  originals. 

Sec.  2 1 .  Every  official  report  made  by  the  commissioner  of 
corporations  and  every  report,  duly  verified,  of  an  examination 
made,  shall  be  prima  facie  evidence  of  the  facts  therein  stated  for 
all  purposes  in  any  action  or  proceedings  wherein  any  investment 
company  or  investment  broker  is  a  party. 

Sec.  22.  If  any  section,  sub-section,  sentence,  clause  or  phrase 
of  this  act  is  for  any  reason  held  to  be  unconstitutional,  such 
decision  shall  not  affect  the  validity  of  the  remaining  portions  of 
this  act.  The  legislature  hereby  declares  that  it  would  have  passed 
this  act,  and  each  section,  sub-section,  sentence,  clause,  and  phrase 
thereof  irrespective  of  the  fact  that  any  one  or  more  other  sections, 
sub-sections,  sentences,  clauses  or  phrases  be  declared  uncon- 
stitutional. 

Sec.  23.  All  acts  and  parts  of  acts  inconsistent  with  the 
provisions  of  this  act  are  hereby  repealed. 

Sec.  24.  The  sum  of  ten  thousand  dollars  is  hereby  appro- 
priated out  of  any  moneys  in  the  state  treasury  not  otherwise 
appropriated  for  the  purpose  of  carrying  this  act  into  effect. 

Sec.  25.      This  act  shall  take  effect  November   1,   1913. 


National  Bank  Act  as  Amended 


Chapter   One. 
THE    CURRENCY    BUREAU. 

1.  Sec.   1   of  the  act  of  June  20,   1874,  provides  that  the  act  The 
entitled  "An  act  to  provide  a  national  currency  secured  by  a  pledge  national-bank 
of   United   States   bonds,    and   to  provide    for   the   circulation    and  act. 
redemption   thereof,"    approved   June   third,    eighteen    hundred    and 

sixty-four,  shall  hereafter  be  known  as  the  "National-bank  act." 

2.  (Sec.    324.)      There  shall   be   in  the   Department   of   the   Comptroller  of 
Treasury  a  Bureau  charged  with  the  execution  of  all  laws  passed   the  Currency. 
by    Congress    relating   to    the    issue    and    regulation    of    a    national 

currency  secured  by  United  States  bonds,  the  chief  officer  of  which 
Bureau  shall  be  called  the  Comptroller  of  the  Currency,  and  shall 
perform  his  duties  under  the  general  direction  of  the  Secretary  of 
the  Treasury. 

3.  (Sec.  325.)  The  Comptroller  of  the  Currency  shall  be  His  appointment, 
appointed  by  the  President,  on  the  recommendation  of  the  Secretary  term,  and  salary. 
of  the  Treasury,  by  and  with  the  advice  and  consent  of  the  Senate, 

and  shall  hold  his  office  for  the  term  of  five  years,  unless  sooner 
removed  by  the  President,  upon  reasons  to  be  communicated  by 
him  to  the  Senate;  and  he  shall  be  entitled  to  a  salary  of  five 
thousand  dollars  a  year. 

4.  (Sec.  326.)  The  Comptroller  of  the  Currency  shall,  within  His  qualification. 
fifteen  days  from  the  time  of  notice  of  his  appointment,  take  and 

subscribe  the  oath  of  office;  and  he  shall  give  to  the  United 
States  a  bond  in  the  penalty  of  one  hundred  thousand  dollars, 
with  not  less  than  two  responsible  sureties,  to  be  approved  by  the 


122  N.    W.    HALSEY    &   CO. 

Secretary  of  the  Treasury,  conditioned  for  the  faithful  discharge  of 
the  duties  of  his  office. 

5.  (Sec.  327.)  There  shall  be  in  the  Bureau  of  the  Comp- 
comptroUer.  iTO\\er  0f  the  Currency  a  Deputy  Comptroller  of  the  Currency,  to 
be  appointed  by  the  Secretary,  who  shall  be  entitled  to  a  salary 
of  two  thousand  eight  hundred  dollars  a  year  (increased  to  three 
thousand  five  hundred  dollars),  and  who  shall  possess  the  power 
and  perform  the  duties  attached  by  law  to  the  office  of  Comptroller 
during  a  vacancy  in  the  office  or  during  the  absence  or  inability 
of  the  Comptroller.  The  Deputy  Comptroller  shall  also  take  the 
oath  of  office  prescribed  by  the  Constitution  and  laws  of  the 
United  States,  and  shall  give  a  like  bond  in  the  penalty  of  fifty 
thousand  dollars. 

Interest  in        6.      (Sec.  329.)      It  shall  not  be  lawful  for  the  Comptroller  or 
national  banks   the  Deputy  Comptroller  of  the  Currency,  either  directly  or  indirectly, 
prohibited,    to  be  interested  in  any  association  issuing  national  currency  under  the 
laws  of  the  United  States. 

Office  clerks.  7.  (Sec.  328.)  The  Comptroller  of  the  Currency  shall  employ, 
from  time  to  time,  the  necessary  clerks,  to  be  appointed  and  classified 
by  the  Secretary  of  the  Treasury,  to  discharge  such  duties  as  the 
Comptroller  shall  direct. 

8.  (SEC.  330.)  The  seal  devised  by  the  Comptroller  of  the 
Currency  for  his  office,  and  approved  by  the  Secretary  of  the 
Treasury,  shall  continue  to  be  the  seal  of  office  of  the  Comptroller, 
and  may  be  renewed  when  necessary.  A  description  of  the  seal, 
with  an  impression  thereof,  and  a  certificate  of  approval  of  the 
Secretary  of  the  Treasury,  shall  be  filed  in  the  office  of  the 
Secretary  of  State. 


Officers, 
vaults,  etc. 


9.  (Sec.  331.)  There  shall  be  assigned,  from  time  to  time,  to 
the  Comptroller  of  the  Currency,  by  the  Secretary  of  the  Treasury, 
suitable  rooms  in  the  Treasury  building  for  conducting  the  business 
of  the  Currency  Bureau,  containing  safe  and  secure  fireproof  vaults, 
in  which  the  Comptroller  shall  deposit  and  safely  keep  all  the 
plates  not  necessarily  in  the  possession  of  engravers  or  printers,  and 
other  valuable  things  belonging  to  his  department;  and  the  Comp- 


NATIONAL   BANK   ACT  123 

troller  shall  from  time  to  time  furnish  the  necessary  furniture, 
stationery,  fuel,  lights,  and  other  proper  conveniences  for  the 
transaction  of  the  business  of  his  office. 

10.  (Sec.  333.)     The  Comptroller  of  the  Currency  shall  make  Annual  report. 
an  annual  report  to  Congress,  at  the  commencement  of  its  session, 

exhibiting — 

First.  A  summary  of  the  state  and  condition  of  every  asso-  Condition  of 
ciation  from  which  reports  have  been  received  the  preceding  year,  national  banks. 
at  the  several  dates  to  which  such  reports  refer,  with  an  abstract 
of  the  whole  amount  of  banking  capital  returned  by  them,  of  the 
whole  amount  of  their  debts  and  liabilities,  the  amount  of  circu- 
lating notes  outstanding,  and  the  total  amount  of  means  and 
resources,  specifying  the  amount  of  lawful  money  held  by  them 
at  the  times  of  their  several  returns,  and  such  other  information  in 
relation  to  such  associations  as  in  his  judgment  may  be  useful. 

Second.     A   statement   of    the    associations   whose   business    has    Closed  banks. 
been  closed  during  the  year,  with  the  amount  of  their  circulation 
redeemed  and  the  amount  outstanding. 

Third.     Any    amendment   to   the   laws   relative   to   banking   by    Amendments 
which  the  system  may  be  improved  and  the  security  of  the  holders    proposed. 
of  its  notes  and  other  creditors  may  be  increased. 

Fourth.  A  statement  exhibiting  under  appropriate  heads  the  Condition  of 
resources  and  liabilities  and  condition  of  the  banks,  banking  com-  other  banks. 
panies,  and  savings  banks  organized  under  the  laws  of  the  several 
States  and  Territories,  such  information  to  be  obtained  by  the 
Comptroller  from  the  reports  made  by  such  banks,  banking  com- 
panies, and  savings  banks  to  the  legislatures  or  officers  of  the 
different  States  and  Territories,  and,  where  such  reports  can  not 
be  obtained,  the  deficiency  to  be  supplied  from  such  other  authentic 
sources  as  may  be  available. 

Fifth.     The  names  and  compensation  of  the  clerks  employed  by    Employees  and 
him,  and  the  whole  amount  of  the  expenses  of  the  banking  depart-    expenses. 
ment  during  the  year. 

1 1 .  (Sec.  381 1 .)    When  the  Annual  Report  of  the  Comptroller     When  annual 
of  the  Currency  upon  the   national   banks   and  banks  under  State    report  is  printed. 


124  N.    W.    HALSEY    &   CO. 


and  Territorial  laws  is  completed,  or  while  it  is  in  process  of 
completion,  if  thereby  the  business  may  be  sooner  dispatched,  the 
work  of  printing  shall  be  commenced,  under  the  superintendence  of 
the  Secretary,  and  the  whole  shall  be  printed  and  ready  for  delivery 
on  or  before  the  first  day  of  December  next  after  the  close  of  the 
year  to  which  the  report  relates. 

Number  of        12.      The  act  of  January  12,  1895,  provides  that  there  shall  be 

copies  to  be  printed  of  the  Annual  Report  of  the  Comptroller  of  the  Currency 

printed,  ten  thousand  copies;  one  thousand  for  the  Senate,  two  thousand  for 

the  House,  and  seven  thousand  for  distribution  by  the  Comptroller 

of  the  Currency. 

Chapter  Two. 

ORGANIZATION    AND    POWERS    OF    NATIONAL 

BANKS. 

Articles  of  13.  (Sec.  5133.)  Associations  For  carrying  on  the  business  of 
association,  banking  under  this  title  may  be  formed  by  any  number  of  natural 
persons,  not  less  in  any  case  than  five.  They  shall  enter  into 
articles  of  association,  which  shall  specify  in  general  terms  the 
object  for  which  the  association  is  formed,  and  may  contain  any 
other  provisions,  not  inconsistent  with  law,  which  the  association 
may  see  fit  to  adopt  for  the  regulation  of  its  business  and  the 
conduct  of  its  affairs.  These  articles  shall  be  signed  by  the 
persons  uniting  to  form  the  association,  and  a  copy  of  them  shall 
be  forwarded  to  the  Comptroller  of  the  Currency,  to  be  filed  and 
preserved  in  his  office. 

Organization        14.      (Sec.  5134.)      The  persons  uniting  to  form  such  an  asso- 
cerlificate.   ciation   shall,   under   their  hands,   made   an   organization   certificate, 
which  shall  specifically  state — 

Title.        First.      The  name  assumed  by  such  association;  which  shall  be 
subject  to  the  approval  of  the  Comptroller  of  the  Currency. 

Location.  Second.  The  place  where  its  operations  of  discount  and  deposit 
are  to  be  carried  on,  designating  the  State,  Territory,  or  District,  and 
the  particular  county  and  city,  town  or  village. 


NATIQNAL   BANK   ACT 125 

Third.      The  amount  of  capital  stock  and  the  number  of  shares    Capital  stock- 
into  which  the  same  is  to  be  divided. 

Fourth.     The  names  and  places  of  residence  of  the  shareholders  Shareholders. 
and  the  number  of  shares  held  by  each  of  them. 

Fifth.      The   fact   that   the   certificate   is   made    to    enable    such   Object  of 
persons  to  avail  themselves  of  the  advantages  of  this  Title.  certificate. 

1 5.  (Sec.  5 1 35.)    The  organization  certificate  shall  be  acknowl-   Execution  of 
edged  before  a  judge  of  some  court  of  record  or  notary  public,   organization 
and  shall  be,  together  with  the  acknowledgment  thereof,   authenti-   certificate. 
cated  by  the  seal  of  such  court  or  notary,  transmitted  to  the  Comp- 
troller of  the  Currency,  who  shall  record  and  carefully  preserve  the 

same  in  his  office. 

16.  (Sec.  5136.)      Upon  duly  making  and  filing  articles  of  Corporate 
association    and    an    organization    certificate,    the    association    shall  powers. 
become,    as    from    the    date    of    the   execution    of    its    organization 
certificate,  a  body  corporate,  and  as  such,   and  in  the  same  desig- 
nated in  the  organization  certificate,  it  shall  have  power — 

First.     To  adopt  and  use  a  corporate  seal.  Seal. 

Second.     To  have  succession  for  the  period  of  twenty  years  from   Term  of 
its  organization,  unless  it  is  sooner  dissolved  according  to  the  pro-  existence. 
visions  of  its  articles  of  association,  or  by  the  act  of  its  shareholders 
owning  two-thirds  of  its  stock,  or  unless  its  franchise  becomes  for- 
feited by  some  violation  of  law. 

Third.     To  make  contracts.  Contracts. 

Fourth.        To  sue  and  be  sued,   complain   and  defend,   in   any  Suits. 
court  of  law  and   [or]   equity,  as  fully  as  natural  persons. 

Fifth.    To  elect  or  appoint  directors,  and  by  its  board  of  directors  Officers. 
to   appoint   a   president,    vice-president,    cashier,    and   other   officers, 
define  their  duties,  require  bonds  of  them  and  fix  the  penalty  thereof, 
dismiss  such  officers  or  any  of  them  at  pleasure,  and  appoint  others 
to  fill  their  places. 

Sixth.      To   prescribe,    by    its   board    of   directors,    by-laws    not  By-Laws. 
inconsistent  with  law,  regulating  the  manner  in  which  its  stock  shall 


126  N.    W.    HALSEY    &   CO. 


be  transferred,  its  directors  elected  or  appointed,  its  officers  appointed, 
its  property  transferred,  its  general  business  conducted,  and  the 
privileges  granted  to  it  by  law  exercised  and  enjoyed. 

Incidental  Seventh.  To  exercise  by  its  board  of  directors,  or  duly  authorized 
powers,  officers  or  agents,  subject  to  law,  all  such  incidental  powers  as  shall 
be  necessary  to  carry  on  the  business  of  banking;  by  discounting  and 
negotiating  promissory  notes,  drafts,  bills  of  exchange,  and  other 
evidences  of  debt;  by  receiving  deposits;  by  buying  and  selling 
exchange,  coin,  and  bullion;  by  loaning  money  on  personal  security; 
and  by  obtaining,  issuing,  and  circulating  notes  according  to  the 
provisions  of  this  Title;  but  no  association  shall  transact  any  business 
except  such  as  is  incidental  and  necessarily  preliminary  to  its  organ- 
ization until  it  has  been  authorized  by  the  Comptroller  of  the  Cur- 
rency to  commence  the  business  of  banking. 

Amount  of  1  7.  (Sec.  5 1  38,  as  amended  by  act  of  March  1 4,  1 900.)  No 
capital  stock  association  shall  be  organized  with  a  less  capital  than  one  hundred 
required,  thousand  dollars,  except  that  banks  with  a  capital  of  not  less  than 
fifty  thousand  dollars  may,  with  the  approval  of  the  Secretary  of 
the  Treasury,  be  organized  in  any  place  the  population  of  which 
does  not  exceed  six  thousand  inhabitants,  and  except  that  banks 
with  a  capital  of  not  less  than  twenty- five  thousand  dollars  may, 
with  the  sanction  of  the  Secretary  of  the  Treasury,  be  organized 
in  any  place  the  population  of  which  does  not  exceed  three  thousand 
inhabitants.  No  association  shall  be  organized  in  a  city  the  popu- 
lation of  which  exceeds  fifty  thousand  persons  with  a  capital  of 
less  than  two  hundred  thousand  dollars. 

Shares  of  stock.  \  8.  (Sec.  5  1  39.)  The  capital  stock  of  each  association  shall  be 
divided  into  shares  of  one  hundred  dollars  each,  and  be  deemed  per- 
sonal property,  and  transferable  on  the  books  of  the  association  in 
such  manner  as  may  be  prescribed  in  the  by-laws  or  articles  of 
association.  Every  person  becoming  a  shareholder  by  such  transfer 
shall,  in  proportion  to  his  shares,  succeed  to  all  the  rights  and  liabil- 
ities of  the  prior  holder  of  such  shares. 

Payment  of         j9       (Sec<   5140.)      At  least  fifty  per  centum  of  the  capital 
L>*    stock  of  every  association  shall  be  paid  in  before  it  shall  be  author- 


NATIONAL   BANK   ACT 127 

ized  to  commence  business;  and  the  remainder  of  the  capital  stock 
of  such  association  shall  be  paid  in  installments  of  at  least  ten 
per  centum  each,  on  the  whole  amount  of  the  capital,  as  frequently 
as  one  installment  at  the  end  of  each  succeeding  month  from  the 
time  it  shall  be  authorized  by  the  Comptroller  of  the  Currency  to 
commence  business;  and  the  payment  of  each  installment  shall  be 
certified  to  the  Comptroller,  under  oath,  by  the  president  or  cashier 
of  the  association. 

20.  (Sec.  5141.)      Whenever  any  shareholder,  or  his  assignee.  Enforcing 
fails  to  pay  any  installment  on  the  stock  when  the  same  is  required  payment  of 
by  the  preceding  section  to  be  paid,  the  directors  of  such  association  capital. 
may  sell  the  stock  of  such  delinquent  shareholder  at  public  auction, 

having  given  three  weeks'  previous  notice  thereof  in  a  newspaper 
published  and  of  general  circulation  in  the  city  or  county  where 
the  association  is  located,  or  if  no  newspaper  is  published  in  said 
city  or  county,  then  in  a  newspaper  published  nearest  thereto,  to 
any  person  who  will  pay  the  highest  price  therefor,  to  be  not  less 
than  the  amount  then  due  thereon,  with  the  expenses  of  adver- 
tisement and  sale;  and  the  excess,  if  any,  shall  be  paid  to  the 
delinquent  shareholder.  If  no  bidder  can  be  found  who  will  pay 
for  such  stock  the  amount  due  thereon  to  the  association,  and  the 
cost  of  advertisement  and  sale,  the  amount  previously  paid  shall 
be  forfeited  to  the  association,  and  such  stock  shall  be  sold  as  the 
directors  may  order,  within  six  months  from  the  time  of  such 
forfeiture,  and  if  not  sold  it  shall  be  canceled  and  deducted  from 
the  capital  stock  of  the  association. 

21.  (Sec.  5141 ).    If  any  such  cancellation  and  reduction  shall  Restoration  of 
reduce  the  capital  of  the  association  below  the  minimum  of  capital  capital. 
required  by  law,   the  capital   stock  shall,   within  thirty  days  from 

the  date  of  such  cancellation,  be  increased  to  the  required  amount; 
in  default  of  which  a  receiver  may  be  appointed,  according  to  the 
provisions  of  section  fifty-two  hundred  and  thirty-four,  to  close  up 
the  business  of  the  association. 

22.  (Sec.  5 1 68.)      Whenever  a  certificate  is  transmitted  to  the  Examination  of 
Comptroller  of  the  Currency,   as  provided  in  this  Title,   and  the  organization 
association   transmitting   the   same   notifies   the   Comptroller   that   at  proceedings. 


128 N.    W.    HALSEY   &   CO. 

least  fifty  per  centum  of  its  capital  stock  has  been  duly  paid  in, 
and  that  such  association  has  complied  with  all  the  provisions  of 
this  Title  required  to  be  complied  with  before  an  association  shall 
be  authorized  to  commence  the  business  of  banking,  the  Comptroller 
shall  examine  into  the  condition  of  such  association,  ascertain 
especially  the  amount  of  money  paid  in  on  account  of  its  capital, 
the  name  and  place  of  residence  of  each  of  its  directors,  and  the 
amount  of  the  capital  stock  of  which  each  is  the  owner  in  good 
faith,  and  generally  whether  such  association  has  complied  with 
all  the  provisions  of  this  Title  required  to  entitle  it  to  engage  in  the 
business  of  banking. 

Certificate  of        23.      (Sec.  5168.)      And  shall  cause  to  be  made  and  attested 

officers  and  by  the  oaths  of  a  majority  of  the  directors,   and  by  the  president 

directors,   or  cashier  of  the  association,  a  statement  of  all  the  facts  necessary 

to  enable  the  Comptroller  to  determine  whether  the  association   is 

lawfully  entitled  to  commence  the  business  of  banking. 

Deposit  of  24.  (Sec.  5155.)  Every  association,  after  having  com- 
United  States  plied  with  the  provisions  of  this  Title,  preliminary  to  the 
bonds,  commencement  of  the  banking  business,  and  before  it  shall 
be  authorized  to  commence  banking  business  under  this 
Title,  shall  transfer  and  deliver  to  the  Treasurer  of  the 
United  States,  as  security  for  its  circulating  notes,  any 
United  States  registered  bonds  bearing  interest,  to  an 
amount  where  the  capital  is  one  hundred  and  fifty  thousand 
dollars  or  less,  of  not  less  than  one-fourth  of  the  capital, 
and  fifty  thousand  dollars  where  the  capital  is  in  excess 
of  one  hundred  and  fifty  thousand  dollars.  (Note. — As 
amended  by  sec.  8  of  the  act  of  July  12,  1882.) 

Comptroller's  25.  (Sec.  5169.)  If,  upon  a  careful  examination  of  the  facts 
certificate  of  so  reported,  and  of  any  other  facts  which  may  come  to  the  knowl- 
authority.  edge  of  the  Comptroller,  whether  by  means  of  a  special  com- 
mission appointed  by  him  for  the  purpose  of  inquiring  into  the 
condition  of  such  association,  or  otherwise,  it  appears  that  such 
association  is  lawfully  entitled  to  commence  the  business  of  banking, 
the  Comptroller  shall  give  to  such  association  a  certificate,  under  his 


NATIONAL   BANK   ACT  129 


hand  and  official  seal,  that  such  association  has  complied  with  all 
the  provisions  required  to  be  complied  with  before  commencing  the 
business  of  banking,  and  that  such  association  is  authorized  to 
commence  such  business.  But  the  Comptroller  may  withhold  from 
an  association  his  certificate  authorizing  the  commencement  of 
business  whenever  he  has  reason  to  suppose  that  the  shareholders 
have  formed  the  same  for  any  other  than  the  legitimate  objects 
contemplated  by  this  Title. 

26.  (Sec.  5170.)      The  association  shall  cause  the  certificate  Publication  of 
issued  under  the  preceding  section  to  be  published  in   some  news-  certificate  of 
paper  printed  in  the  city  or  county  where  the  association  is  located,  authority. 

for  at  least  sixty  days  next  after  the  issuing  thereof;  or,  if  no 
newspaper  is  published  in  such  city  or  county,  then  in  the  news- 
paper published  nearest  thereto. 

27.  (Sec.   5145.)      The  affairs  of  each  association  shall  be  Number  and 
managed  by  not  less  than  five  directors,  who  shall  be  elected  by  election  of 
the  shareholders  at  a  meeting  to  be  held  at  any  time  before  the  directors. 
association  is   authorized   by   the   Comptroller  of   the   Currency   to 
commence  the  business  of  banking,  and  afterward  at  meetings  to  be 

held  on  such  day  in  January  of  each  year  as  is  specified  therefor  in 
the  articles  of  association.  The  directors  shall  hold  office  for  one 
year,  and  until  their  successors  are  elected  and  have  qualified. 

28.  (SEC.  5146,   as  amended  February  28,    1905.)      Every  Qualifications  of 
Director  must,  during  his  whole  term  of  service,  be  a  citizen  of  the  directors. 
United  States,  and  at  least  three-fourths  of  the  directors  must  have 

resided  in  the  State,  Territory,  or  District  in  which  the  association 
is  located  for  at  least  one  year  immediately  preceding  their  election, 
and  must  be  residents  therein  during  their  continuance  in  office. 
Every  director  must  own,  in  his  own  right,  at  least  ten  shares  of 
the  capital  stock  of  the  association  of  which  he  is  a  director,  unless 
the  capital  of  the  bank  shall  not  exceed  twenty-five  thousand 
dollars,  in  which  case  he  must  own  in  his  own  right  at  least  five 
shares  of  such  capital  stock.  Any  director  who  ceases  to  be  the 
owner  of  the  required  number  of  shares  of  the  stock,  or  who 
becomes  in  any  other  manner  disqualified,  shall  thereby  vacate  his 
place. 


130 


N.    W.    HALSEY    &   CO. 


Qualifications  of 

"votes  at 

elections. 


Oaths  of 
directors. 


Failure  to  hold 
annual  election. 


Vacancies  in 

board  of 

directors. 


30.  (Sec.  5144.)  In  all  elections  of  directors,  and  in  deciding 
all  questions  at  meetings  of  shareholders,  each  shareholder  shall  be 
entitled  to  one  vote  on  each  share  of  stock  held  by  him.  Share- 
holders may  vote  by  proxies  duly  authorized  in  writing;  but  no 
officer,  clerk,  teller,  or  bookkeeper  of  such  association  shall  act  as 
proxy;  and  no  shareholder  whose  liability  is  past  due  and  unpaid 
shall  be  allowed  to  vote. 

31.  (Sec.  5147.)  Each  director,  when  appointed  or  elected, 
shall  take  an  oath  that  he  will,  so  far  as  the  duty  devolves  on  him, 
diligently  and  honestly  administer  the  affairs  of  such  association, 
and  will  not  knowingly  violate,  or  willingly  permit  to  be  violated, 
any  of  the  provisions  of  this  Title,  and  that  he  is  the  owner  in 
good  faith,  and  in  his  own  right,  of  the  number  of  shares  of  stock 
required  by  this  Title,  subscribed  by  him,  or  standing  in  his  name 
on  the  books  of  the  association,  and  that  the  same  is  not  hypoth- 
ecated or  in  any  way  pledged  as  security  for  any  loan  or  debt. 
Such  oath,  subscribed  by  the  director  making  it,  and  certified  by 
the  officer  before  whom  it  is  taken,  shall  be  immediately  transmitted 
to  the  Comptroller  of  the  Currency,  and  shall  be  filed  and  pre- 
served in  his  office. 

32.  (Sec.  5149.)  If,  from  any  cause,  an  election  of  directors 
is  not  made  at  the  time  appointed,  the  association  shall  not  for  that 
cause  be  dissolved,  but  an  election  may  be  held  on  any  subsequent 
day,  thirty  days'  notice  thereof  in  all  cases  having  been  given  in 
a  newspaper  published  in  the  city,  town,  or  county  in  which  the 
association  is  located;  and  if  no  newspaper  is  published  in  such 
city,  town  or  county  such  notice  shall  be  published  in  a  newspaper 
published  nearest  thereto.  If  the  articles  of  association  do  not  fix 
the  day  on  which  the  election  shall  be  held,  or  if  no  election  is  held 
on  the  day  fixed,  the  day  for  the  election  shall  be  designated  by  the 
board  of  directors  in  their  by-laws,  or  otherwise;  or  if  the  directors 
fail  to  fix  the  day,  shareholders  representing  two-thirds  of  the  shares 
may  do  so. 

33.  (Sec.  5148.)  Any  vacancy  in  the  board  shall  be  filled  by 
appointment  by  the  remaining  directors,  and  any  director  so 
appointed  shall  hold  his  place  until  the  next  election. 


NATIONAL   BANK   ACT  131 


34.  (Sec.  5150.)    One  of  the  directors,  to  be  chosen  by  the    President  shall 
board,  shall  be  the  president  of  the  board.  be  a  director. 

35.  (SEC.  5185.)      Associations  may  be  organized  in  the  man-    Organization  of 
ner  prescribed  by  this  Title  for  the  purpose  of  issuing  notes  payable    £0"*  banks. 

in  gold. 

36.  The  act  of  February  14,  1880,  provides  that  any  national    Conversion  of 
gold  bank  organized  under  the  provisions  of  the  laws  of  the  United    gold  banks. 
States  may,  in  the  manner  and  subject  to  the  provisions  prescribed 

by  section  fifty-one  hundred  and  fifty-four  of  the  Revised  Statutes 
of  the  United  States  for  the  conversion  of  banks  incorporated  under 
the  laws  of  any  State,  cease  to  be  a  gold  bank  and  become  such  an 
association  as  is  authorized  by  section  fifty-one  hundred  and  thirty- 
three,  for  carrying  on  the  business  of  banking,  and  shall  have  the 
same  powers  and  privileges,  and  shall  be  subject  to  the  same  duties, 
responsibilities,  and  rules,  in  all  respects,  as  are  by  law  prescribed 
for  such  associations:  Provided,  That  all  certificates  of  organization 
which  shall  be  issued  under  this  act  shall  bear  the  date  of  the 
original  organization  of  each  bank  respectively  as  a  gold  bank. 

37.  (Sec.  5154.)      Any  bank  incorporated  by  special  law,  or    Conversion  of 
any  banking  institution  organized  under  a  general  law  of  any  State,    5 late  banks. 
may  become  a  national  association  under  this  Title  by   the  name 

prescribed  in  its  organization  certificate;  and  in  such  case  the  articles 
of  association  and  the  organization  certificate  may  be  executed  by 
a  majority  of  the  directors  of  the  bank  or  banking  institution;  and 
the  certificate  shall  declare  that  the  owners  of  two-thirds  of  the 
capital  stock  have  authorized  the  directors  to  make  such  certificate, 
and  to  change  and  convert  the  bank  or  banking  institution  into  a 
national  association.  A  majority  of  the  directors,  after  executing  the 
articles  of  association  and  organization  certificate,  shall  have  power 
to  execute  all  other  papers,  and  to  do  whatever  may  be  required  to 
make  its  organization  perfect  and  complete  as  a  national  association. 
The  shares  of  any  such  bank  may  continue  to  be  for  the  same 
amount  each  as  they  were  before  the  conversion,  and  the  directors  may 
continue  to  be  the  directors  of  the  association  until  others  are  elected 
or  appointed  in  accordance  with  the  provisions  of  this  chapter;  and 
any   State   bank   which   is    a   stockholder   in   any   other    bank,    by 


132 N.    W.    HALSEY    fr   CO. 

authority  of  State  laws,  may  continue  to  hold  its  stock,  although 
either  bank,  or  both,  may  be  organized  under  and  have  accepted 
the  provisions  of  this  Title.  When  the  Comptroller  of  the  Currency 
has  given  to  such  association  a  certificate,  under  his  hand  and  official 
seal,  that  the  provisions  of  this  Title  have  been  complied  with,  and 
that  it  is  authorized  to  commence  the  business  of  banking,  the  asso- 
ciation shall  have  the  same  powers  and  privileges,  and  shall  be 
subject  to  the  same  duties,  responsibilities,  and  rules,  in  all  respects, 
as  are  prescribed  for  other  associations,  originally  organized  as 
national  banking  associations,  and  shall  be  held  and  regarded  as 
such  an  association.  But  no  such  association  shall  have  a  less  capital 
than  the  amount  prescribed  for  associations  organized  under  this 
Title. 

Capital  of        38.      (Sec.  3410.)      The  capital  of  any  State  bank  or  banking 

state  banks,    association  which  has  ceased  or  shall  cease  to  exist,  or  which  has 

been  or  shall  be  converted  into  a  national  bank,  shall  be  assumed 

to  be  the  capital  as  it  existed  immediately  before  such  bank  ceased 

to  exist  or  was  converted  as  aforesaid. 

Converted  banks  39.  (Sec.  5155.)  It  shall  be  lawful  for  any  bank  or  banking 
may  retain  association,  organized  under  State  laws  and  having  branches,  the 
branches,  capital  being  joint  and  assigned  to  and  used  by  the  mother  bank 
and  branches  in  definite  proportions,  to  become  a  national  banking 
association  in  conformity  with  existing  laws  and  to  retain  and  keep 
in  operation  its  branches,  or  such  one  or  more  of  them  as  it  may 
elect  to  retain,  the  amount  of  the  circulation  redeemable  at  the 
mother  bank  and  each  branch  to  be  regulated  by  the  amount  of 
capital  assigned  to  and  used  by  each. 

Personal  liability)  40  (Sec  5151.)  The  shareholders  of  every  national  banking 
of  shareholders,  association  shall  be  held  individually  responsible,  equally  and 
ratably,  and  not  one  for  another,  for  all  contracts,  debts,  and 
engagements  of  such  association  to  the  extent  of  the  amount  of  their 
stock  therein,  at  the  par  value  thereof,  in  addition  to  the  amount 
invested  in  such  shares,  except  that  shareholders  of  any  banking 
association  now  existing  under  State  laws  having  not  less  than  five 
millions   of   dollars   of   capital   actually   paid   in   and   a   surplus   of 


NATIONAL   BANK   ACT  133 

twenty  per  centum  on  hand,  both  to  be  determined  by  the  Comp- 
troller of  the  Currency,  shall  be  liable  only  to  the  amount  invested 
in  their  shares;  and  such  surplus  of  twenty  per  centum  shall  be 
kept  undiminished,  and  be  in  addition  to  the  surplus  provided  for 
in  this  Title;  and  if  at  any  time  there  is  a  deficiency  in  such 
surplus  of  twenty  per  centum  such  association  shall  not  pay  any 
dividends  to  its  shareholders  until  the  deficiency  is  made  good;  and 
in  case  of  such  deficiency  the  Comptroller  of  the  Currency  may 
compel  the  association  to  close  its  business  and  wind  up  its  affairs 
under  the  provisions  of  chapter  four  of  this  Title. 

41.  (Sec.  5152.)     Persons  holding  stock  as  executors,  adminis-  Exceptions  for 
trators,  guardians,  or  trustees  shall  not  be  personally  subject  to  any   trustees,  etc. 
liability   as  stockholders;  but  the  estates  and  funds  in  their  hands 

shall  be  liable  in  like  manner  and  to  the  same  extent  as  the  testator, 
intestate,  ward,  or  person  interested  in  such  trust  funds  would  be  if 
living  and  competent  to  act  and  hold  the  stock  in  his  own  name. 

42.  Sec.  5139  provides  that  no  change  shall  be  made  in  the  Amendment 
articles   of   association    of   a    national    bank   by    which    the    rights,  °f  fl't'ctes 
remedies,  or  security  of  the  existing  creditors  of  the  association  shall  res»IC'e"- 
be  impaired. 

43.  (SEC.  5142.)      Any  association  formed  under  this  Title   ^crease  oj 
may,   by  its  articles  of   association,   provide  for  an  increase   of   its 

capital  from  time  to  time,  as  may  be  deemed  expedient,  subject  to 
the  limitations  of  this  Title.  But  the  maximum  of  such  increase 
to  be  provided  in  the  articles  of  association  shall  be  determined  by 
the  Comptroller  of  the  Currency.  Sec.  1  of  the  act  of  May  1, 
1886,  provides  that  any  national  banking  association  may,  with 
the  approval  of  the  Comptroller  of  the  Currency,  by  the  vote  of 
shareholders  owning  two-thirds  of  the  stock  of  such  association, 
increase  its  capital  stock,  in  accordance  with  existing  laws,  to  any 
sum  approved  by  the  said  Comptroller,  notwithstanding  the  limit 
fixed  in  its  original  articles  of  association  and  determined  by  said 
Comptroller;  and  no  increase  of  the  capital  stock  of  any  national 
banking   association   either  within   or  beyond   the   limit   fixed   in   its 


134  N.    W.    HAL5EY    &   CO. 

original  articles  of  association  shall  be  made  except  in  the  manner 
herein  provided. 

When  increase  44.  (Sec.  5142.)  And  no  increase  of  capital  shall  be  valid 
becomes  valid,  until  the  whole  amount  of  such  increase  is  paid  in,  and  notice  thereof 
has  been  transmitted  to  the  Comptroller  of  the  Currency,  and  his 
certificate  obtained  specifying  the  amount  of  such  increase  of  capital 
stock,  with  his  approval  thereof,  and  that  it  has  been  duly  paid  in 
as  part  of  the  capital  of  such  association. 

Reduction  of  45.  (Sec.  5143.)  Any  association  formed  under  this  Title 
capital  stock-  may,  by  the  vote  of  shareholders  owning  two-thirds  of  its  capital 
stock,  reduce  its  capital  to  any  sum  not  below  the  amount  required 
by  this  Title  to  authorize  the  formation  of  associations,  but  no  such 
reduction  shall  be  allowable  which  will  reduce  the  capital  of  the 
association  below  the  amount  required  for  its  outstanding  circulation, 
nor  shall  any  such  reduction  be  made  until  the  amount  of  the  pro- 
posed reduction  has  been  reported  to  the  Comptroller  of  the  Cur- 
rency and  his  approval  thereof  obtained. 

Change  of  title       46.     Sees.  2,  3  and  4  of  the  act  of  May  1,  1886,  provide: 
and  location. 

Sec.  2.      That  any  national  banking  association  may  change  its 

name  or  the  place  where  its  operations  of  discount  and  deposit  are 
to  be  carried  on  to  any  other  place  within  the  same  State,  not  more 
than  thirty  miles  distant,  with  the  approval  of  the  Comptroller  of 
the  Currency,  by  the  vote  of  shareholders  owning  two-thirds  of  the 
stock  of  such  association.  A  duly  authenticated  notice  of  the  vote 
and  of  the  new  name  or  location  selected  shall  be  sent  to  the  office 
of  the  Comptroller  of  the  Currency,  but  no  change  of  name  or 
location  shall  be  valid  until  the  Comptroller  shall  have  issued  his 
certificate  of  approval  of  the  same. 

Sec.  3.  That  all  debts,  liabilities,  rights,  provisions,  and  powers 
of  the  association  under  its  old  name  shall  devolve  upon  and  inure 
to  the  association  under  its  new  name. 

Sec.  4.  That  nothing  in  this  act  contained  shall  be  so  construed 
as  in  any  manner  to  release  any  national  banking  association  under 
its  old  name  or  at  its  old  location  from  any  liability,  or  affect  any 


NATIONAL   BANK   ACT 135 

action  or  proceeding  in  law  in  which  said  association  may  be  or 
become  a  party  or  interested. 

47.  (Sec.  5156.)      That  nothing  in  this  title  shall  affect  any  Status  of  national 
appointments  made,   acts  done,   or  proceedings   had  or  commenced  banks  organized 
prior  to   the  third  day  of  June,   eighteen   hundred   and  sixty-four,  under  the  act  of 
in  or  toward  the  organization  of  any  national  banking  association  February  25, 
under  the  act  of  February  twenty-five,  eighteen  hundred  and  sixty-  1863. 

three;  but  all  associations  which  on  the  third  day  of  June,  eighteen 
hundred  and  sixty-four,  were  organized  or  commenced  to  be 
organized  under  that  act  shall  enjoy  all  the  rights  and  privileges 
granted,  and  be  subject  to  all  the  duties,  liabilities,  and  restrictions 
imposed  by  this  Title,  notwithstanding  all  the  steps  prescribed  by 
this  Title  for  the  organization  of  associations  were  not  pursued,  if 
such  associations  were  duly  organized  under  that  act. 

Note. — See  page  217  for  Additional  Circulation  Act  of  May 
30,  1908. 

Chapter  Three. 

BANK  CIRCULATION. 

48.  (Sec.  5158.)  The  term  "United  States  Bonds,"  as  United  States 
used  throughout  this  chapter,  shall  be  construed  to  mean  bonds  defined. 
registered  bonds  of  the  United  States. 

49.  (Sec.  5159  as  amended  by  section  8,  act  of  July  12,    Security)  for 
1882,  and  section   1,  act  of  December  21,   1905.)     Every    circulation. 
association,  after  having  complied  with  the  provisions  of 

this  Title,  preliminary  to  the  commencement  of  the  bank- 
ing business,  and  before  it  shall  be  authorized  to  com- 
mence banking  business  under  this  Title,  shall  transfer  and 
deliver  to  the  Treasurer  of  the  United  States  any  United 
States  registered  bonds,  bearing  interest,  or  Panama  canal 
bonds,  to  an  amount  not  less  than  one-fourth  of  the 
capital,  the  capital  being  $150,000  or  less,  as  security  for 
their  circulating  notes.  Such  bonds  shall  be  received  by 
the  Treasurer  upon  deposit  and  shall  be  by  him  safely 
kept  in  his  office  until  they  shall  be  otherwise  disposed 
of  in  pursuance  of  the  provisions  of  this  Title. 


136  N.    W.    HALSEY    &   CO. 

Section  4,  act  of  June  20,  1874,  provides  in  part  that  the 
amount  of  bonds  on  deposit  for  circulation  shall  not  be 
reduced  below  $50,000.  This  determines  the  amount  of 
bonds  required  to  be  deposited  by  banks  organizing  with 
capital  stock  of  over  $150,000. 

(See  sec.  5159  of  the  United  States  Revised  Statutes; 
sec.  4,  act  of  June  20,  1874;  sec  8,  act  of  July  12,  1882, 
and  act  of  March  14,  1900,  as  to  relation  of  bond  deposit 
to  capital.) 

Relation  of  50.  (Sec.  5160.)  The  deposit  of  bonds  made  by  each 
bond  deposit  association  shall  be  increased  as  its  capital  may  be  paid 
to  capital.  Up  or  increased,  so  that  every  association  shall  at  all 
times  have  on  deposit  with  the  Treasurer  registered  United 
States  bonds  to  the  amount  required  by  law.  And  any 
association  that  may  desire  to  reduce  its  capital  or  close 
up  its  business  and  dissolve  its  organization  may  take  up 
its  bonds  upon  returning  to  the  Comptroller  its  circulating 
notes  in  the  proportion  hereinafter  required,  or  may  take 
up  any  excess  of  bonds  beyond  the  amount  required  by 
law,  and  upon  which  no  circulating  notes  have  been 
delivered. 

Exchange  of  51.  (Sec.  5161.)  To  facilitate  a  compliance  with  the 
bonds,  two  preceding  sections,  the  Secretary  of  the  Treasury  is 
authorized  to  receive  from  any  association,  and  cancel, 
any  United  States  coupon  bonds,  and  to  issue  in  lieu 
thereof  registered  bonds  of  like  amount,  bearing  a  like 
rate  of  interest,  and  having  the  same  time  to  run. 

Bonds  held  by  52.  (Sec.  5162.)  All  transfers  of  United  States  bonds 
treasurer,  made  by  any  association  under  the  provisions  of  this 
Title  shall  be  made  to  the  Treasurer  of  the  United  States 
in  trust  for  the  association,  with  a  memorandum  written 
or  printed  on  each  bond,  and  signed  by  the  cashier,  or 
some  other  officer  of  the  association  making  the  deposit. 
A  receipt  shall  be  given  to  the  association,  by  the 
Comptroller  of  the  Currency,  or  by  a  clerk  appointed 
by  him  for  that  purpose,  stating  that  the  bond  is  held  in 


NATIONAL   BANK   ACT  137 


trust  for  the  association  on  whose  behalf  the  transfer  is 
made,  and  as  security  for  the  redemption  and  payment  of 
any  circulating  notes  that  have  been  or  may  be  delivered 
to  such  association.  No  assignment  or  transfer  of  any 
such  bond  by  the  Treasurer  shall  be  deemed  valid  unless 
countersigned  by  the  Comptroller  of  the  Currency. 

53.  (Sec.  5 1 63.)    The  Comptroller  of  the  Currency  shall  Record  of  bond 
keep  in  his  office  a  book  in  which  he  shall  cause  to  be  transfers. 
entered,  immediately  upon  countersigning  it,  every  transfer 

or  assignment  by  the  Treasurer,  of  any  bonds  belonging 
to  a  national  banking  association,  presented  for  his 
signature.  He  shall  state  in  such  entry  the  name  of  the 
association  from  whose  account  the  transfer  is  made,  the 
name  of  the  party  to  whom  it  is  made,  and  the  par  value 
of  the  bonds  transferred. 

54.  (Sec.  5 1 64.)   The  Comptroller  of  the  Currency  shall,  Notice  of 
immediately  upon  countersigning  and  entering  any  transfer  transfer. 
or  assignment  by  the  Treasurer  of  any  bonds  belonging  to 

a  national  banking  association,  advise  by  mail  the  associa- 
tion from  whose  accounts  the  transfer  is  made  of  the  kind 
and  numerical  designation  of  the  bonds  and  the  amount 
thereof  so  transferred. 

55.  (Sec.  5165.)    The  Comptroller  of  the  Currency  shall  Examination  of 
have  at  all  times,  during  office  hours,  access  to  the  books  bonds  and 

of  the  Treasurer  of  the  United  States  for  the  purpose  of  records. 
ascertaining  the  corectness  of  any  transfer  or  assignment 
of  the  bonds  deposited  by  an  association  presented  to 
the  Comptroller  to  countersign;  and  the  Treasurer  shall 
have  the  like  access  to  the  book  mentioned  in  section 
fifty-one  hundred  and  sixty-three,  during  office  hours,  to 
ascertain  the  correctness  of  the  entries  in  the  same;  and 
the  Comptroller  shall  also  at  all  times  have  access  to  the 
bonds  on  deposit  with  the  Treasurer  to  ascertain  their 
amount  and  condition. 

56.  (Sec.  5166.)    Every  association  having  bonds  depos-  Annual 

ited  in  the  office  of  the  Treasurer  of  the  United  States  shall,  examination  of 
once  or  oftener  in  each  fiscal  year,  examine  and  compare  bonds. 


138  N.    W.    HALSEY    &   CO. 


the  bonds  pledged  by  the  association  with  the  books 
of  the  Comptroller  of  the  Currency  and  with  the  accounts 
of  the  association,  and,  if  they  are  found  correct,  to  execute 
to  the  Treasurer  a  certificate  setting  forth  the  different 
kinds  and  the  amounts  thereof,  and  that  the  same  are  in 
the  possession  and  custody  of  the  Treasurer  at  the  date 
of  the  certificate.  Such  examination  shall  be  made  at 
such  time  or  times  during  the  ordinary  business  hours  as 
the  Treasurer  and  the  Comptroller,  respectively,  may  select, 
and  may  be  made  by  an  officer  or  agent  of  such  association, 
duly  appointed  in  writing  for  that  purpose;  and  his  certifi- 
cate before  mentioned  shall  be  of  like  force  and  validity 
as  if  executed  by  the  president  and  cashier.  A  duplicate 
of  such  certificate,  signed  by  the  Treasurer,  shall  be 
retained  by  the  association. 

General  5  7.  (Sec.  5 1 67.)  The  bonds  transferred  to  and  deposited 
provisions  with  the  Treasurer  of  the  United  States  by  any  association 
respecting  for  the  security  of  its  circulating  notes  shall  be  held  ex- 
bonds.  clusively  for  that  purpose  until  such  notes  are  redeemed, 
except  as  provided  in  this  Title.  The  Comptroller  of  the 
Currency  shall  give  to  any  such  association  powers  of 
attorney  to  receive  and  appropriate  to  its  own  use  the 
interest  on  the  bonds  which  it  has  so  transferred  to  the 
Treasurer;  but  such  powers  shall  become  inoperative 
whenever  such  association  fails  to  redeem  its  circulating 
notes.  Whenever  the  market  or  cash  value  of  any  bonds 
thus  deposited  with  the  Treasurer  is  reduced  below  the 
amount  of  the  circulation  issued  for  the  same  the 
Comptroller  may  demand  and  receive  the  amount  of 
such  depreciation  in  other  United  States  bonds  at  cash 
value,  or  in  money,  from  the  association,  to  be  deposited 
with  the  Treasurer  as  long  as  such  depreciation  continues. 
And  the  Comptroller,  upon  the  terms  prescribed  by  the 
Secretary  of  the  Treasury,  may  permit  an  exchange  to 
be  made  of  any  of  the  bonds  deposited  with  the  Treasurer 
by  any  association  for  other  bonds  of  the  United  States 
authorized  to  be  received  as  security  for  circulating  notes 
if  he  is  of  opinion  that  such  an  exchange  can  be  made 


NATIONAL    BANK   ACT 


139 


without  prejudice  to  the  United  States;  and  he  may  direct 
the  return  of  any  bonds  to  the  association  which  trans- 
ferred the  same,  in  sums  of  not  less  than  one  thousand 
dollars,  upon  the  surrender  to  him  and  the  cancellation 
of  a  proportionate  amount  of  such  circulating  notes: 
Provided,  That  the  remaining  bonds  which  shall  have  been 
transferred  by  the  association  offering  to  surrender  circu- 
lating notes  are  equal  to  the  amount  required  for  the 
circulating  notes  not  surrendered  by  such  association,  and 
that  the  amount  of  bonds  in  the  hands  of  the  Treasurer 
is  not  diminished  below  the  amount  required  to  be  kept 
on  deposit  with  him,  and  that  there  has  been  no  failure 
by  the  association  to  redeem  its  circulating  notes,  nor  any 
other  violation  by  it  of  the  provisions  of  this  Title,  and 
that  the  market  or  cash  value  of  the  remaining  bonds  is 
not  below  the  amount  required  for  the  circulation  issued 
for  the  same. 

58.  Sec.  10  of  the  act  of  July  12,  1882,  as  amended  by 
act  of  March  14,  1900,  provides  that  upon  the  deposit  with 
the  Treasurer  of  the  United  States,  by  any  national  bank- 
ing association,  of  any  bonds  of  the  United  States  in  the 
manner  provided  by  existing  law,  such  association  shall 
be  entitled  to  receive  from  the  Comptroller  of  the  Currency 
circulating  notes  in  blank,  registered  and  countersigned 
as  provided  by  law,  equal  in  amount  to  the  par  value  of 
the  bonds  so  deposited;  and  any  national  banking  associa- 
tion now  having  bonds  on  deposit  for  the  security  of 
circulating  notes,  and  upon  which  an  amount  of  circulating 
notes  has  been  issued  less  than  the  par  value  of  the  bonds, 
shall  be  entitled,  upon  due  application  to  the  Comptroller 
of  the  Currency,  to  receive  additional  circulating  notes 
in  blank  to  an  amount  which  will  increase  the  circulating 
notes  held  by  such  association  to  the  par  value  of  the 
bonds  deposited,  such  additional  notes  to  be  held  and 
treated  in  the  same  way  as  circulating  notes  of  national 
banking  associations  heretofore  issued,  and  subject  to  all 
the  provisions  of  law  affecting  such  notes:  Provided, 
That  the  circulating  notes  furnished  to  national  banking 


Amount  of 

circulation 

obtainable. 


140  N.    W.    HALSEY    &   CO. 

associations  under  the  provisions  of  this  act  shall  be  of  the 
denominations  prescribed  by  law,  except  that  no  national 
banking  association  shall,  after  the  passage  of  this  act, 
be  entitled  to  receive  from  the  Comptroller  of  the  Cur- 
rency, or  to  issue  or  reissue  or  place  in  circulation,  more 
than  one-third  in  amount  of  its  circulating  notes  of  the 
denomination  of  five  dollars:  And  Provided,  further,  That 
the  total  amount  of  such  notes  issued  to  any  such  associa- 
tion may  equal  at  any  time  but  shall  not  exceed  the  amount 
at  such  time  of  its  capital  stock  actually  paid  in. 

Preparation  of  "Sec.  5 1  72.  (As  amended  May  thirtieth,  nineteen  hundred  and 
bank  circulation,  eight.)  In  order  to  furnish  suitable  notes  for  circulation,  the 
Comptroller  of  the  Currency  shall,  under  the  direction  of  the 
Secretary  of  the  Treasury,  cause  plates  and  dies  to  be  engraved, 
in  the  best  manner  to  guard  against  counterfeiting  and  fraudulent 
alterations,  and  shall  have  printed  therefrom,  and  numbered,  such 
quantity  of  circulating  notes,  in  blank,  of  the  denominations  of 
five  dollars,  ten  dollars,  twenty  dollars,  fifty  dollars,  one  hundred 
dollars,  five  hundred  dollars,  one  thousand  dollars,  and  ten 
thousand  dollars,  as  may  be  required  to  supply  the  associations 
entitled  to  receive  the  same.  Such  notes  shall  state  upon  their  face 
that  they  are  secured  by  United  States  bonds  or  other  securities, 
certified  by  the  written  or  engraved  signatures  of  the  Treasurer 
and  Register  and  by  the  imprint  of  the  seal  of  the  Treasury. 
They  shall  also  express  upon  their  face  the  promise  of  the  associa- 
tion receiving  the  same  to  pay  on  demand,  attested  by  the  signature 
of  the  president  or  vice-president  and  cashier.  The  Comptroller  of 
the  Currency,  acting  under  the  direction  of  the  Secretary  of  the 
Treasury,  shall  as  soon  as  practicable  cause  to  be  prepared  circu- 
lating notes  in  blank,  registered  and  countersigned,  as  provided  by 
law,  to  an  amount  equal  to  fifty  per  centum  of  the  capital  stock 
of  each  national  banking  association;  such  notes  to  be  deposited 
in  the  Treasury  or  in  the  subtreasury  of  the  United  States  nearest 
the  place  of  business  of  each  association,  and  to  be  held  for  such 
association,  subject  to  the  order  of  the  Comptroller  of  the  Currency, 
for  their  delivery  as  provided  by  law:  Provided,  That  the 
Comptroller  of  the  Currency  may  issue  national  bank  notes  of  the 


NATIONAL   BANK   ACT  HI 

present  form  until  plates  can  be  prepared  and  circulating  notes 
issued  as  above  provided:  Provided,  however.  That  in  no  event 
shall  bank  notes  of  the  present  form  be  issued  to  any  bank  as 
additional  circulation  provided  for  by  this  Act." 

60.  Sec.  5  of  the  act  of  June  20,    1 874,  provides   that  the  Circulation  shall 
Comptroller  of  the  Currency  shall,  under  such  rules  and  regulations  bear  charter 

as  the  Secretary  of  the  Treasury  may  prescribe,  cause  the  charter  number. 
numbers  of  the  associations  to  be  printed  upon  all   national-bank 
notes  which  may  be  hereafter  issued  by  him. 

61.  (Sec.  5173.)      The  plates  and  special  dies  to  be  procured  Control  of  plates 
by  the  Comptroller  of  the  Currency  for  the  printing  of  such  circu-  and  dies. 
lating  notes  shall  remain  under  his  control   and  direction  and  the 

expenses  necessarily  incurred  in  executing  the  laws  respecting  the 
procuring  of  such  notes  and  all  other  expenses  of  the  Bureau  of  the 
Currency  [except  as  provided  by  sec.  3,  act  June  20,  1874, 
and  sees.  6  and  8,  act  of  July  12,  1882]  shall  be  paid  out  of 
the  proceeds  of  the  taxes  or  duties  assessed  and  collected  on  the 
circulation  of  national  banking  associations  under  this  Title. 

62.  (Sec.  5 1  74.)  The  Comptroller  of  the  Currency  shall  cause  Examination  of 
to  be  examined,  each  year,  the  plates,  dies,  but  pieces  [bed  pieces] ,  plates  and  dies. 
and    other    material    from    which    the    national-bank    circulation    is 

printed,  in  whole  or  in  part,  and  file  in  his  office  annually  a  correct 
list  of  the  same.  Such  material  as  shall  have  been  used  in  the 
printing  of  the  notes  of  associations  which  are  in  liquidation,  or 
have  closed  business,  shall  be  destroyed,  under  such  regulations 
as  shall  be  prescribed  by  the  Comptroller  of  the  Currency  and 
approved  by  the  Secretary  of  the  Treasury.  The  expenses  of 
any  such  examination  or  destruction  shall  be  paid  out  of  any 
appropriation  made  by  Congress  for  the  special  examination  of 
national  banks  and  bank-note  plates. 

63.  (Sec.  5182.)      After  any  association  receiving  circulating    Circulation,  for 
notes  under  this  Title  has  caused  its  promise  to   pay  such  notes    what  receivable. 
on   demand   to   be   signed   by    the   president   or   vice-president   and 

cashier  thereof,  in  such  manner  as  to  make  them  obligatory 
promissory  notes,  payable  on  demand  at  its  place  of  business,  such 
association  may  issue  and  circulate  the  same  as  money.     And  the 


142  N.    W.    HALSEY    &   CO. 

same  shall  be  received  at  par  in  all  parts  of  the  United  States 
in  payment  of  taxes,  excises,  public  lands,  and  all  other  dues  to 
the  United  States,  except  duties  on  imports;  and  also  for  all 
salaries  and  other  debts  and  demands  owing  by  the  United  States 
to  individuals,  corporations,  and  associations  within  the  United 
States,  except  interest  on  the  public  debt,  and  in  redemption  of  the 
national  currency. 

Circulation  of  64.  (Sec.  5185.)  Associations  may  be  organized  in  the  manner 
gold  banks,  prescribed  by  this  Title  for  the  purpose  of  issuing  notes  payable  in 
gold;  and  upon  the  deposit  of  any  United  States  bonds  bearing 
interest  payable  in  gold  with  the  Treasurer  of  the  United  States, 
in  the  manner  prescribed  for  other  associations,  it  shall  be  lawful 
for  the  Comptroller  of  the  Currency  to  issue  to  the  association 
making  the  deposit  circulating  notes  of  different  denominations, 
but  none  of  them  of  less  than  five  dollars,  and  not  exceeding  in 
amount  eighty  per  centum  of  the  par  value  of  the  bonds  deposited, 
which  shall  express  the  promise  of  the  association  to  pay  them, 
upon  presentation  at  the  office  at  which  they  are  issued,  in  gold  coin 
of  the  United  States,  and  shall  be  so  redeemable. 

Worn-out  or  65.  (Sec.  5184.)  It  shall  be  the  duty  of  the  Comptroller 
mutilated  0f  {ne  Currency  to  receive  worn-out  or  mutilated  circulating  notes 
circulation.  jSSUed  by  any  banking  association,  and  also,  on  due  proof  of  the 
destruction  of  any  such  circulating  notes,  to  deliver  in  place  thereof 
to  the  association  other  blank  circulating  notes  to  an  equal  amount. 
Such  worn-out  or  mutilated  notes,  after  a  memorandum  has  been 
entered  in  the  proper  books,  in  accordance  with  such  regulations 
as  may  be  established  by  the  Comptroller,  as  well  as  all  circulating 
notes  which  shall  have  been  paid  or  surrendered  to  be  canceled, 
shall  be  macerated  in  presence  of  four  persons,  one  to  be  appointed 
by  the  Secretary  of  the  Treasury,  one  by  the  Comptroller  of  the 
Currency,  one  by  the  Treasurer  of  the  United  States,  and  one  by 
the  association,  under  such  regulations  as  the  Secretary  of  the 
Treasury  may  prescribe.  A  certificate  of  such  maceration,  signed 
by  the  parties  so  appointed,  shall  be  made  in  the  books  of  the 
Comptroller,  and  a  duplicate  thereof  forwarded  to  the  association 
whose  notes  are  thus  canceled. 


NATIONAL   BANK   ACT 143 

66.  Sec.  3  of  the  act  of  June  20,  1874,  provides  that  every  Provisions  for 
association  organized,  or  to  be  organized,  under  the  provisions  redeeming 
of  the  said  act,  and  of  the  several  acts  amendatory  thereof,  shall  circulation. 
at  all  times  keep  and  have  on  deposit  in  the  Treasury  of  the  United 
States,  in  lawful  money  of  the  United  States,  a  sum  equal  to  five 
per  centum  of  its  circulation,  to  be  held  and  used  for  the  redemption 
of  such  circulation;  which  sum  shall  be  counted  as  a  part  of  its 
lawful  reserve,  as  provided  in  section  two  of  this  act;  and  when 
the  circulating  notes  of  any  such  associations,  assorted  or  unassorted, 
shall  be  presented  for  redemption,  in  sums  of  one  thousand  dollars 
or  any  multiple  thereof,  to  the  Treasurer  of  the  United  States, 
the  same  shall  be  redeemed  in  United  States  notes.  All  notes 
so  redeemed  shall  be  charged  by  the  Treasurer  of  the  United  States 
to  the  respective  associations  issuing  the  same,  and  he  shall  notify 
them  severally,  on  the  first  day  of  each  month,  or  oftener,  at  his 
discretion,  of  the  amount  of  such  redemptions;  and  whenever  such 
redemptions  for  any  association  shall  amount  to  the  sum  of  five 
hundred  dollars,  such  association  so  notified  shall  forthwith  deposit 
with  the  Treasurer  of  the  United  States  a  sum  in  United  States 
notes  equal  to  the  amount  of  its  circulating  notes  so  redeemed. 
And  all  notes  of  national  banks,  worn,  defaced,  mutilated,  or  other- 
wise unfit  for  circulation,  shall,  when  received  by  any  assistant 
treasurer,  or  at  any  designated  depositary  of  the  United  States, 
be  forwarded  to  the  Treasurer  of  the  United  States  for  redemption 
as  provided  herein.  And  when  such  redemptions  have  been  so 
reimbursed,  the  circulating  notes  so  redeemed  shall  be  forwarded 
to  the  respective  associations  by  which  they  were  issued;  but  if  any 
of  such  notes  are  worn,  mutilated,  defaced,  or  rendered  otherwise 
unfit  for  use,  they  shall  be  forwarded  to  the  Comptroller  of  the 
Currency  and  destroyed,  and  replaced  as  now  provided  by  law; 
Provided,  That  each  of  said  associations  shall  reimburse  to  the 
Treasury  the  charges  for  transportation  and  the  costs  for  assorting 
such  notes;  and  the  associations  hereafter  organized  shall  also 
severally  reimburse  to  the  Treasury  the  cost  of  engraving  such 
plates  as  shall  be  ordered  by  each  association  respectively;  and  the 
amount  assessed  upon  each  association  shall  be  in  proportion  to 
the  circulation  redeemed,  and  be  charged  to  the  fund  on  deposit 
with  the  Treasurer. 


144 N.    W.    HALSEY    &   CO. 

Withdrawing  67.  Sec.  4  of  the  act  of  June  20,  1874,  provides  that 
circulation,  any  association  organized  under  this  act,  or  any  of  the 
acts  of  which  this  is  an  amendment,  desiring  to  withdraw 
its  circulating  notes,  in  whole  or  in  part,  may,  upon  the 
deposit  of  lawful  money  with  the  Treasurer  of  the  United 
States  in  sums  of  not  less  than  nine  thousand  dollars, 
take  up  the  bonds  which  said  association  has  on  deposit 
with  the  Treasurer  for  the  security  of  such  circulating 
notes,  which  bonds  shall  be  assigned  to  the  bank  in  the 
manner  specified  in  the  nineteenth  section  of  the  national- 
bank  act;  and  the  outstanding  notes  of  said  association, 
to  an  amount  equal  to  the  legal-tender  notes  deposited, 
shall  be  redeemed  at  the  Treasury  of  the  United  States, 
and  destroyed  as  now  provided  by  law:  Provided,  That 
the  amount  of  the  bonds  on  deposit  for  circulation  shall 
not  be  reduced  below  fifty  thousand  dollars. 

General       68.     The  act  of  July  12,   1882,  provides:      (Sec.  8.)      That 

provisions  for  tne  national  banks  which  shall  hereafter  make  deposits  of   lawful 

Withdrawing  money  for  the  retirement  in  full  of  their  circulation  shall,   at  the 

circulation.  ^jme  0f  tnejr  deposit,  be  assessed  for  the  cost  of  transporting  and 

redeeming  their  notes  then  outstanding,  a  sum  equal  to  the  average 

cost  of  the  redemption  of  national-bank  notes  during  the  preceding 

year,    and  shall   thereupon   pay   such   assessment;    and   all   national 

banks  which  have  heretofore  made  or  shall  hereafter  make  deposits 

of   lawful   money   for   the   reduction  of   their   circulation   shall    be 

assessed,   and  shall  pay   an   assessment  in  the  manner  specified  in 

section  three  of  the  act  approved  June  twentieth,  eighteen  hundred 

and  seventy-four,   for  the  cost  of  transporting  and  redeeming  their 

notes  redeemed   from  such  deposits   subsequently  to  June  thirtieth, 

eighteen  hundred  and  eighty-one. 

Sec.  9.  (As  amended  May  thirtieth,  nineteen  hundred 
and  eight.)  That  any  national  banking  association  desiring 
to  withdraw  its  circulating  notes,  secured  by  deposit  of 
United  States  bonds  in  the  manner  provided  in  section 
four  of  the  Act  approved  June  twentieth,  eighteen  hundred 
and  seventy-four,  is  hereby  authorized  for  that  purpose 
to  deposit  lawful  money  with  the  Treasurer  of  the  United 


NATIONAL   BANK   ACT  145 

—  i  - 

States  and,  with  the  consent  of  the  Comptroller  of  the 
Currency  and  the  approval  of  the  Secretary  of  the  Treas- 
ury to  withdraw  a  proportionate  amount  of  bonds  held 
as  security  for  its  circulating  notes  in  the  order  of  such 
deposits:  Provided,  That  not  more  than  nine  millions  of 
dollars  of  lawful  money  shall  be  so  deposited  during  any 
calendar  month  for  this  purpose. 

"Any  national  banking  association  desiring  to  withdraw 
any  of  its  circulating  notes,  secured  by  the  deposit  of 
securities  other  than  bonds  of  the  United  States,  may  make 
such  withdrawal  at  any  time  in  like  manner  and  effect  by 
the  deposit  of  lawful  money  or  national  bank  notes  with 
the  Treasurer  of  the  United  States,  and  upon  such  deposit 
a  proportionate  share  of  the  securities  so  deposited  may  be 
withdrawn:  Provided,  That  the  deposits  under  this  section 
to  retire  notes  secured  by  the  deposit  of  securities  other 
than  bonds  of  the  United  States  shall  not  be  covered  into 
the  Treasury,  as  required  by  section  six  of  an  Act  entitled 
'An  Act  directing  the  purchase  of  silver  bullion  and  the 
issue  of  Treasury  notes  thereon,  and  for  other  purposes,' 
approved  July  fourteenth,  eighteen  hundred  and  ninety, 
but  shall  be  retained  in  the  Treasury  for  the  purpose  of 
redeeming  the  notes  of  the  bank  making  such  deposit." 

69.  Sec.  6  of  the  act  of  July  12,  1882,  provides  that  the  Circulation  of 
circulating  notes  of  any  association  so  extending  the  period  of  its  extended  banks. 
succession  which  shall  have  been  issued  to  it  prior  to  such  extension 
shall  be  redeemed  at  the  Treasury  of  the  United  States,  as  pro- 
vided in  section  three  of  the  act  of  June  twentieth,  eighteen  hundred 
and  seventy-four,  entitled  "An  act  fixing  the  amount  of  United 
States  notes,  providing  for  redistribution  of  national  bank  currency, 
and  for  other  purposes,"  and  such  notes  when  redeemed  shall  be 
forwarded  to  the  Comptroller  of  the  Currency,  and  destroyed,  as 
now  provided  by  law;  and  at  the  end  of  three  years  from  the 
date  of  the  extension  of  the  corporate  existence  of  each  bank  the 
association  so  extended  shall  deposit  lawful  money  with  the  Treas- 
urer of  the  United  States  sufficient  to  redeem  the  remainder  of  the 
circulation  which  was  outstanding  at  the  date  of  its  extension,   as 


146  N.    W.    HALSEY    &   CO. 

provided  in  sections  fifty-two  hundred  and  twenty-two,  fifty-two 
hundred  and  twenty-four,  and  fifty-two  hundred  and  twenty-five 
of  the  Revised  Statutes;  and  any  gain  that  may  arise  from  the 
failure  to  present  such  circulating  notes  for  redemption  shall  inure 
to  the  benefit  of  the  United  States;  and  from  time  to  time,  as 
such  notes  are  redeemed  or  lawful  money  deposited  therefor  as 
provided  herein,  new  circulating  notes  shall  be  issued  as  provided 
for  by  this  act,  bearing  such  devices,  to  be  approved  by  the  Secre- 
tary of  the  Treasury,  as  shall  make  them  readily  distinguishable 
from  the  circulating  notes  heretofore  issued:  Provided,  however. 
That  each  banking  association  which  shall  obtain  the  benefit  of 
this  act  shall  reimburse  to  the  Treasury  the  cost  of  preparing  the 
plate  or  plates  for  such  new  circulating  notes  as  shall  be  issued 
to  it. 

Circulation  of  70.  (Sec.  5225.)  Whenever  the  Treasurer  has  redeemed  any 
liquidating  banks,  of  the  notes  of  an  association  which  has  commenced  to  close  its 
affairs,  he  shall  cause  the  notes  to  be  mutilated  and  charged  to 
the  redemption  account  of  the  association;  and  all  notes  so 
redeemed  by  the  Treasurer  shall,  every  three  months,  be  certified 
to  and  destroyed  in  the  manner  prescribed  in  section  fifty-one 
hundred   and  eighty-four. 

Circulation  of  71.  Sec.  8  of  the  act  of  June  20,  1874,  provides:  And  it 
closed  banfe.  shall  be  the  duty  of  the  Treasurer,  assistant  treasurers,  designated 
depositaries,  and  national  bank  depositaries  of  the  United  States 
to  assort  and  return  to  the  Treasury  for  redemption  the  notes  of 
such  national  banks  as  have  failed,  or  gone  into  voluntary  liquida- 
tion for  the  purpose  of  winding  up  their  affairs,  and  of  such  as 
shall  hereafter  so  fail  or  go  into  liquidation. 

Regulations  for        ^2.      (Sec.  5232.)      The  Secretary  of  the  Treasury  may,  from 

redemption   ^me   to   nme»   make   such   regulations   respecting   the   disposition   to 

records.   ^e   ma<^e   or"   circulating   notes    after   presentation    at   the    Treasury 

of  the  United  States  for  payment,  and  respecting  the  perpetuation  of 

the  evidence  of  the  payment  thereof,  as  may  seem  to  him  proper. 

Redeemed  notes        ^3.      (Sec.  5233.)      All  notes  of  national  banking  associations 
to  be  canceled,   presented  at  the  Treasury  of  the  United  States  for  payment  shall, 
on  being  paid,  be  canceled. 


NATIONAL   BANK   ACT 147 

74.  Sec.  3  of  the  act  approved  June  20,   1 874,  provides  that  Redemption  in 
when   the   circulating   notes   of    any   such    associations,    assorted    or  United  States 
unassorted,    shall    be    presented    for    redemption,    in    sums    of    one  notes. 
thousand  dollars  or  any  multiple  thereof,  to  the  Treasurer  of  the 

United  States,  the  same  shall  be  redeemed  in  United  States  notes. 

75.  Sec.  6  of  the  act  of  July   14,    1890,  provides  that  upon    Disposition  of 
the  passage  of  this  act  the  balances  standing  with   the   Treasurer    redemption 
of  the   United   States   to   the   respective   credits   of   national   banks    account. 

for  deposits  made  to  redeem  the  circulating  notes  of  such  banks, 
and  all  deposits  thereafter  received  for  like  purpose,  shall  be 
covered  into  the  Treasury  as  a  miscellaneous  receipt,  and  the 
Treasurer  of  the  United  States  shall  redeem  from  the  general 
cash  in  the  Treasury  the  circulating  notes  of  said  banks  which 
may  come  into  his  possession  subject  to  redemption;  and  upon  the 
certificate  of  the  Comptroller  of  the  Currency  that  such  notes 
have  been  received  by  him  and  that  they  have  been  destroyed 
and  that  no  new  notes  will  be  issued  in  their  place,  reimburse- 
ment of  their  amount  shall  be  made  to  the  Treasurer,  under  such 
regulations  as  the  Secretary  of  the  Treasury  may  prescribe, 
from  an  appropriation  hereby  created,  to  be  known  as  "national- 
bank  notes,  redemption  account."  But  the  provisions  of  this  act 
shall  not  apply  to  the  deposits  received  under  section  three  of 
the  act  of  June  twentieth,  eighteen  hundred  and  seventy-four, 
requiring  every  national  bank  to  keep  in  lawful  money  with  the 
Treasurer  of  the  United  States  a  sum  equal  to  five  per  centum  of 
its  circulation,  to  be  held  and  used  for  the  redemption  of  its 
circulating  notes;  and  the  balance  remaining  of  the  deposits  so 
covered  shall,  at  the  close  of  each  month,  be  reported  on  the 
monthly  public  debt  statement  as  debt  of  the  United  States  bearing 
no  interest. 

76.  The  act  of  July  28,    1892,  stipulates  that  the  provisions  Redemption  of 
of   the   Revised   Statutes  of   the  United   States,   providing   for   the  incomplete 
redemption  of  national-bank  notes  shall  apply  to  all  national-bank  circulation. 
notes   that  have  been  or  may  be  issued   to,   or  received   by,    any 

national  bank,  notwithstanding  such  notes  may  have  been  lost  by  or 
stolen    from    the    bank    and    put    in    circulation    without    signature 


148 


N.    W.    HALSEY    &   CO. 


Issue  of  other 
notes  prohibited. 

Fraudulent  notes 
to  be  marked. 


or   upon    the    forged    signature   of    the    president    or    vice-president 
and  cashier. 

Banks  take        77.      (Sec.  5196.)      Every  national  banking  association  formed 

circulation   or   existing   under   this    Title   shall    take    and    receive   at  par   for 

at  par.    any  debt  or  liability  to  it,  any  and  all  notes  or  bills  issued  by  any 

lawfully  organized  national  banking  association.     But  this  provision 

shall   not   apply   to   any   association   organized   for   the   purpose   of 

issuing  notes  payable  in  gold. 

78.  (Sec.  5183.)  No  national  banking  association  shall  issue 
post  notes  or  any  other  notes  to  circulate  as  money  than  such  as 
are  authorized  by  the  provisions  of  this  Title. 

79.  Sec.  5  of  the  act  of  June  30,  1876,  provides  that  all 
United  States  officers  charged  with  the  receipt  or  disbursement 
of  public  moneys,  and  all  officers  of  national  banks,  shall  stamp 
or  write  in  plain  letters  the  word  "counterfeit,"  "altered,"  or 
"worthless,"  upon  all  fraudulent  notes  issued  in  the  form  of  and 
intended  to  circulate  as  money  which  shall  be  presented  at  their 
places  of  business;  and  if  such  officer  shall  wrongfully  stamp  any 
genuine  note  of  the  United  States,  or  of  the  national  banks,  they 
shall  upon  presentation,  redeem  such  notes  at  the  face  value  thereof. 

Note. — See  page  217  for  additional  Circulation  Act  of  May 
30,   1908. 

Chapter  Four. 
TAX  ON  CIRCULATION. 

Tax  on  "Sec.  5214.  (As  amended  May  thirtieth,  nineteen  hun- 
circulation.  dred  and  eight.)  National  banking  associations  having  on 
deposit  bonds  of  the  United  States,  bearing  interest  at  the 
rate  of  two  per  centum  per  annum,  including  the  bonds 
issued  for  the  construction  of  the  Panama  Canal,  under 
the  provisions  of  section  eight  of  'An  Act  to  provide  for 
the  construction  of  a  canal  connecting  the  waters  of  the 
Atlantic  and  Pacific  oceans,'  approved  June  twentieth, 
nineteen  hundred  and  two,  to  secure  its  circulating  notes, 
shall  pay  to  the  Treasurer  of  the  United  States,  in  the 
months  of  January  and  July,  a  tax  of  one-fourth  of  one 
per  centum  each  half  year  upon  the  average  amount  of 


NATIONAL   BANK   ACT __ 149 

such  of  its  notes  in  circulation  as  are  based  upon  the  deposit 
of  such  bonds;  and  such  associations  having  on  deposit 
bonds  of  the  United  States  bearing  interest  at  a  rate  higher 
than  two  per  centum  per  annum  shall  pay  a  tax  of  one-half 
of  one  per  centum  each  half  year  upon  the  average  amount 
of  such  of  its  notes  in  circulation  as  are  based  upon  the 
deposit  of  such  bonds.  National  banking  associations 
having  circulating  notes  secured  otherwise  than  by  bonds 
of  the  United  States  shall  pay  for  the  first  month  a  tax 
at  the  rate  of  five  per  centum  per  annum  upon  the  average 
amount  of  such  of  their  notes  in  circulation  as  are  based 
upon  the  deposit  of  such  securities,  and  afterwards  an 
additional  tax  of  one  per  centum  per  annum  for  each 
month  until  a  tax  of  ten  per  centum  per  annum  is  reached, 
and  thereafter  such  tax  of  ten  per  centum  per  annum,  upon 
the  average  amount  of  such  notes.  Every  national 
banking  association  having  outstanding  circulating  notes 
secured  by  a  deposit  of  other  securities  than  United 
States  bonds  shall  make  monthly  returns,  under  oath  of 
its  president  or  cashier,  to  the  Treasurer  of  the  United 
States,  in  such  form  as  the  Treasurer  may  prescribe,  of 
the  average  monthly  amount  of  its  notes  so  secured  in 
circulation;  and  it  shall  be  the  duty  of  the  Comptroller 
of  the  Currency  to  cause  such  reports  of  notes  in  circula- 
tion to  be  verified  by  examination  of  the  banks'  records. 
The  taxes  received  on  circulating  notes  secured  otherwise 
than  by  bonds  of  the  United  States  shall  be  paid  into 
the  Division  of  Redemption  of  the  Treasury  and  credited 
and  added  to  the  reserve  fund  held  for  the  redemption  of 
United  States  and  other  notes." 

81.      (Sec.  5215.)      In  order  to  enable  the  Treasurer  to  assess  Semi-annual 
the    duties    imposed    by    the    preceding    sections,    each    association  return  of 
shall   within   ten  days   from   the   first   days   of   January   and   July  circulation. 
of  each  year,  make  a  return,   under  the  oath  of  its  president  or 
cashier,   to  the  Treasurer  of  the  United  States,   in  such   form  as 
the  Treasurer  may  prescribe,   of  the   average   amount  of  its   notes 
in  circulation   for   the   six  months   next  preceding   the   most   recent 


150 


N.    W.    HALSEY    &   CO. 


first  day  of  January  or  July.  Every  association  which  fails  so 
to  make  such  returns  shall  be  liable  to  a  penalty  of  two  hundred 
dollars,  to  be  collected  either  out  of  the  interest  as  it  may  become 
due  such  association  on  the  bonds  deposited  with  the  Treasurer, 
or,  at  his  option,  in  the  manner  in  which  penalties  are  to  be  collected 
of  other  corporations  under  the  laws  of  the  United  States. 


Proceedings  on 
default. 


Enforcing  tax 
on  circulation. 


Refunding 
excess  tax. 


Circulation, 

when  exempt 

from  tax. 


82.  (Sec.  5216.)  Whenever  any  association  fails  to  make 
the  half  yearly  return  required  by  the  preceding  section,  the  duties 
to  be  paid  by  such  association  shall  be  assessed  upon  the  amount 
of  notes  delivered  to  such  association  by  the  Comptroller  of  the 
Currency. 

83.  (Sec.  5217.)  Whenever  an  association  fails  to  pay  the 
duties  imposed  by  the  three  preceding  sections,  the  sums  due  may 
be  collected  in  the  manner  provided  for  the  collection  of  United 
States  taxes  from  other  corporations;  or  the  Treasurer  may  reserve 
the  amount  out  of  the  interest,  as  it  may  become  due,  on  the  bonds 
deposited  with  him  by  such  defaulting  association. 

84.  (Sec.  5218.)  In  all  cases  where  an  association  has  paid 
or  may  pay  in  excess  of  what  may  be  or  has  been  found  due 
from  it,  on  account  of  the  duty  required  to  be  paid  to  the 
Treasurer  of  the  United  States,  the  association  may  state  an 
account  therefor,  which,  on  being  certified  by  the  Treasurer  of  the 
United  States,  and  found  correct  by  the  Comptroller  of  the 
Treasury,  shall  be  refunded  in  the  ordinary  manner  by  warrant 
on  the  Treasury. 

85.  (Sec.  3411.)  Whenever  the  outstanding  circulation  of 
any  bank,  association,  corporation,  company,  or  person  is  reduced 
to  an  amount  not  exceeding  five  per  centum  of  the  chartered  or 
declared  capital  existing  at  the  time  the  same  was  issued,  said 
circulation  shall  be  free  from  taxation;  and  whenever  any  bank 
which  has  ceased  to  issue  notes  for  circulation  deposits  in  the 
Treasury  of  the  United  States,  in  lawful  money,  the  amount  of 
its  outstanding  circulation,  to  be  redeemed  at  par,  under  such 
regulations  as  the  Secretary  of  the  Treasury  shall  prescribe,  it 
shall  be  exempt  from  any  tax  upon  such  circulation. 


NATIONAL   BANK   ACT 151 

86.  Sees.    19,  20,  and  21   of  the  act  of  February  8,    1875,    Tax  on 
provide:  unauthorized 

circulation. 
Sec.     19.     That    every    person,    firm,    association,    other    than 

national   banking   associations,    and   every   corporation,   State   bank, 

or   State  banking  association  shall  pay   a  tax  of   ten  per   centum 

on  the   amount  of  their  own  notes  used  for  circulation  and  paid 

out  by  them. 

Sec.  20.  That  every  such  person,  firm,  association,  corporation, 
State  bank,  or  State  banking  association,  and  also  every  national 
banking  association,  shall  pay  a  like  tax  of  ten  per  centum  on 
the  amount  of  notes  of  any  person,  firm,  association,  other  than 
a  national  banking  association,  or  of  any  corporation,  State  bank, 
or  State  banking  association,  or  of  any  town,  city,  or  municipal 
corporation,  used  for  circulation  and  paid  out  by  them. 

Sec.  2 1 .  That  the  amount  of  such  circulating  notes,  and  of 
the  tax  due  thereon,  shall  be  returned,  and  the  tax  paid  at  the 
same  time,  and  in  the  same  manner,  and  with  like  penalties  for 
failure  to  return  and  pay  the  same,  as  provided  by  law  for  the 
return  and  payment  of  taxes  on  deposits,  capital,  and  circulation 
imposed  by  the  existing  provisions  of  internal-revenue  law. 

87.  (Sec.  3414.)      A  true  and  complete  return  of  the  monthly  Semi-annual 
amount  of   circulation,   as   aforesaid,   and  of   the   monthly   amount  return  of  taxable 
of  notes  of  persons,   town,   city,   or  municipal   corporations,  •  State  circulation. 
banks,    or    State    banking    associations   paid    out    as    aforesaid    for 

the  previous  six  months,  shall  be  made  and  rendered  in  duplicate 
on  the  first  day  of  December  and  the  first  day  of  June  by  each  of 
such  banks,  associations,  corporations,  companies,  or  persons,  with 
a  declaration  annexed  thereto,  under  the  oath  of  such  person,  or 
of  the  president,  or  cashier  of  such  bank,  association,  corporation, 
or  company,  in  such  form  and  manner  as  may  be  prescribed  by 
the  Commissioner  of  Internal  Revenue,  that  the  same  contains 
a  true  and  faithful  statement  of  the  amounts  subject  to  tax,  as 
aforesaid;  and  one  copy  shall  be  transmitted  to  the  collector  of 
the  district  in  which  any  such  bank,  association,  corporation, 
or  company  is  situated,  or  in  which  such  person  has  his  place  of 
business,  and  one  copy  to  the  Commissioner  of  Internal  Revenue. 


152    N.    W.    HALSEY    &   CO. 

Failure  to  make  88.  (Sec.  3415.)  In  default  of  the  returns  provided  in  the 
such  return,  preceding  section  the  amount  of  circulation  and  notes  of  persons, 
town,  city,  and  municipal  corporations,  State  banks,  and  State 
banking  associations  paid  out  as  aforesaid,  shall  be  estimated  by 
the  Commissioner  of  Internal  Revenue,  upon  the  best  information 
he  can  obtain.  And  for  any  refusal  or  neglect  to  make  return 
and  payment  any  such  bank,  association,  corporation,  company, 
or  person  so  in  default  shall  pay  a  penalty  of  two  hundred  dollars, 
besides  the  additional  penalty  and  forfeitures  provided  in  other  cases, 

Tax  on  89.  (Sec.  3416.)  Whenever  any  State  bank  or  banking  asso- 
converted  bank  ciation  has  been  converted  into  a  national  banking  association,  and 
circulation.  Such  national  banking  association  has  assumed  the  liabilities  of  such 
State  bank  or  banking  association,  including  the  redemption  of 
its  bills,  by  any  agreement  or  understanding  whatever  with  the 
representatives  of  such  State  bank  or  banking  association,  such 
national  banking  association  shall  be  held  to  make  the  required 
return  and  payment  on  the  circulation  outstanding,  so  long  as  such 
circulation  shall  exceed  five  per  centum  of  the  capital  before  such 
conversion  of  such  State  bank  or  banking  association. 

Tax  provisions  90.  (Sec.  3417.)  The  provisions  of  this  chapter  relating  to 
restricted,  the  tax  on  the  circulation  of  banks  and  to  their  returns,  except  as 
contained  in  sections  thirty-four  hundred  and  eleven,  thirty-four 
hundred  and  twelve,  thirty-four  hundred  and  thirteen,  and  thirty- 
four  hundred  and  sixteen,  and  such  parts  of  sections  thirty-four 
hundred  and  fourteen  and  thirty-four  hundred  and  fifteen  as  relate 
to  the  tax  of  ten  per  centum  on  certain  notes,  shall  not  apply  to 
associations  which  are  taxed  under  and  by  virtue  of  Title 
"National  Banks." 

Taxation  of  91.  (Sec.  3701.)  All  stocks,  bonds,  Treasury  notes,  and  other 
notes,  etc.  obligations  of  the  United  States  shall  be  exempt  from  taxation  by 
or  under  State  or  municipal  or  local  authority.  The  act  of  August 
13,  1894,  provides:  (Sec.  1.)  That  circulating  notes  of  national 
banking  associations  and  United  States  legal-tender  notes  and  other 
notes  and  certificates  of  the  United  States,  payable  on  demand 
and  circulating  or  intended  to  circulate  as  currency,  and  gold, 
silver,  or  other  coin  shall  be  subject  to  taxation  as  money  on  hand 


NATIONAL    BANK   ACT 153 

or  on  deposit  under  the  laws  of  any  State  or  Territory:  Provided, 
That  any  such  taxation  shall  be  exercised  in  the  same  manner  and 
at  the  same  rate  that  any  such  State  or  Territory  shall  tax  money 
or  currency  circulating  as  money  within  its  jurisdiction. 

Sec.  2.  That  the  provisions  of  this  act  shall  not  be  deemed 
or  held  to  change  existing  laws  in  respect  of  the  taxation  of  national 
banking  associations. 

Chapter  Five. 

REGULATION    OF   THE    BANKING    BUSINESS. 

92.  (Sec.  5157.)      The  provisions  of  chapters  two,  three,  and    Laws  governing 
four    [three,   five,   and  seven  of  this  edition]    of  this  Title,  which    certain 

are   expressed  without  restrictive   words,    as   applying  to    "national    associations. 
banking  association,"  or  to  "associations,"  apply  to  all  associations 
organized  to  carry  on  the  business  of  banking  under   any   act  of 
Congress. 

93.  (Sec.  5190.)  The  usual  business  of  each  national  banking  Place  of 
association  shall  be  transacted  at  an  office  or  banking  house  located  business. 
in  the  place  specified  in  its  organization  certificate. 

94.  (Sec.  5191.)      Every  national  banking  association  in  either  Reserve  cities 
of    the    following    cities:    Albany,    Baltimore,    Boston,    Cincinnati,  and  reserve 
Chicago,  Cleveland,  Detroit,  Louisville,  Milwaukee,  New  Orleans,  requirements. 
New   York,    Philadelphia,   Pittsburg,   Saint   Louis,   San   Francisco, 

and  Washington,  shall  at  all  times  have  on  hand  in  lawful  money 
of  the  United  States,  an  amount  equal  to  at  least  twenty-five  per 
centum  of  the  aggregate  amount  of  its  deposits  in  all  respects;  and 
every  other  association  shall  at  all  times  have  on  hand,  in  lawful 
money  of  the  United  States,  an  amount  equal  to  at  least  fifteen 
per  centum  of  the  aggregate  amount  of  its  deposits  in  all  respects. 
(See  paragraphs   104  and   105.) 

NOTE— Act  of  May  30,  1908. 

"Sec.   1 4.     That  the  provisions  of  section  fifty-one  hundred  and  No  reserve  need 

ninety-one  of  the  Revised  Statutes,  with  reference  to  the  reserves  of  be  held  against 

national  banking  associations,  shall  not  apply  to  deposits  of  public  deposits  of 

moneys  by  the  United  States  in  designated  depositaries."  public  money. 


154 N.    W.    HALSEY   &   CO. 

Reserve  not  95.  (Sec.  5191.)  Whenever  the  lawful  money  of  any  associa- 
maintained.  tion  in  any  of  the  cities  named  shall  be  below  the  amount  of  twenty- 
five  per  centum  of  its  deposits,  and  whenever  the  lawful  money 
of  any  other  association  shall  be  below  fifteen  per  centum  of  its 
deposits,  such  association  shall  not  increase  its  liabilities  by  making 
any  new  loans  or  discounts  otherwise  than  by  discounting  or 
purchasing  bills  of  exchange  payable  at  sight,  nor  make  any  dividend 
of  its  profits  until  the  required  proportion  between  the  aggregate 
amount  of  its  deposits  and  its  lawful  money  of  the  United  States 
has  been  restored.  And  the  Comptroller  of  the  Currency  may 
notify  any  association,  whose  lawful-money  reserve  shall  be  below 
the  amount  above  required  to  be  kept  on  hand,  to  make  good  such 
reserve;  and  if  such  association  shall  fail  for  thirty  days  there- 
after so  to  make  good  its  reserve  of  lawful  money,  the  Comptroller 
may,  with  the  concurrence  of  the  Secretary  of  the  Treasury,  appoint 
a  receiver  to  wind  up  the  business  of  the  association,  as  provided 
in  section  fifty-two  hundred  and  thirty-four. 

Reserve  agents*  96.  (Sec.  5192.)  Three-fifths  of  the  reserve  of  fifteen  per 
balances  counted  centum  required  by  the  preceding  section  to  be  kept  may  consist 
as  reserve,  of  balances  due  to  an  association  from  associations  approved  by 
the  Comptroller  of  the  Currency,  organized  under  the  act  of  June 
three,  eighteen  hundred  and  sixty-four,  or  under  this  Title,  and 
doing  business  in  the  cities  of  Albany,  Baltimore,  Boston,  Charles- 
ton, Chicago,  Cincinnati,  Cleveland,  Detroit,  Louisville,  Milwaukee, 
New  Orleans,  New  York,  Philadelphia,  Pittsburg,  Richmond, 
Saint  Louis,  San  Francisco,   and  Washington. 

Clearing-house       97.      Clearing-house    certificates,    representing    specie    or    lawful 
certificates  money  specially   deposited   for   the  purpose,   of   any   clearing-house 
counted  as  association  shall  also  be  deemed  to  be  lawful  money  in  the  posses- 
reserve,  sion  of  any   association  belonging  to  such   clearing  house,   holding 
and  owning  such  certificate,  within  the  preceding  section. 

Redemption       98.     Sec.  3  of  the  act  of  June  20,   1874,  provides  that  the  five 
fund  counted  per   cent   redemption    fund,    which   shall    at    all   times   be   kept   on 
as  reserve,  deposit  with  the  Treasurer  of  the  United  States,  shall  be  counted  as 
a  part  of  the  lawful  reserve. 

99.      (Sec.  5193.)     The  Secretary  of  the  Treasury  may  receive 
United  States  notes  on  deposit,  without  interest,  from  any  national 


NATIONAL   BANK   ACT  155 

banking  association,  in  sums  of  not  less  than  ten  thousand  dollars,   United  States 
and  issue  certificates  therefor  in  such  form  as  he  may  prescribe,  in  note  certificates 
denominations  of  not  less  than   five  thousand  dollars,   and  payable  counted  as 
on  demand  in  United  States  notes  at  the  place  where  the  deposits  reserve. 
were  made.     The  notes  so  deposited  shall  not  be  counted  as  part 
of  the  lawful-money  reserve  of  the  association;  but  the  certificates 
issued  therefor  may  be  counted  as  part  of  its  lawful-money  reserve, 
and  may  be  accepted  in  the  settlement  of  clearing-house  balances 
at  the  places  where  the  deposits  therefor  were  made.      (Repealed 
March  14,   1900.) 

100.  (Sec.  5194.)      The  power  conferred  on  the  Secretary  of  Redemption  of 
the   Treasury   by  the  preceding   section   shall   not  be   exercised   so  sucn  certificates. 
as   to   create    any   expansion   or   contraction   of    the   currency;    and 

United  States  notes  for  which  certificates  are  issued  under  that 
section,  or  other  United  States  notes  of  like  amount,  shall  be 
held  as  special  deposits  in  the  Treasury  and  used  only  for  redemption 
of  such  certificates. 

101.  Sec.   12  of  the  act  of  July  12,   1882,  provides  that  the  United  States 
Secretary   of   the   Treasury   is    authorized   and   directed   to   receive  gold  certificates 
deposits  of  gold  coin  with  the  Treasurer  or  assistant  treasurers  of  counted  as 

the  United  States,  in  sums  of  not  less  than  twenty  dollars,  and  to  reserve. 
issue  certificates  therefor  in  denominations  of  not  less  than  twenty 
dollars  each,  corresponding  with  the  denominations  of  United 
States  notes.  The  coin  deposited  for  or  representing  the  certificates 
of  deposit  shall  be  retained  in  the  Treasury  for  the  payment  of 
the  same  on  demand.  Said  certificates  shall  be  receivable  for 
customs,  taxes,  and  all  public  dues,  and  when  so  received  may 
be  reissued;  and  such  certificates,  as  also  silver  certificates,  when 
held  by  any  national  banking  association,  shall  be  counted  as 
part  of  its  lawful  reserve;  and  no  national  banking  association  shall 
be  a  member  of  any  clearing  house  in  which  such  certificates  shall 
not  be  receivable  in  the  settlement  of  clearing-house  balances: 
Provided,  That  the  Secretary  of  the  Treasury  shall  suspend  the 
issue  of  such  gold  certificates  whenever  the  amount  of  gold  coin 
and  gold  bullion  in  the  Treasury  reserved  for  the  redemption  of 
United  States  notes  falls  below  one  hundred  millions  of  dollars; 
and  the  provisions  of  section   fifty-two  hundred   and  seven   of   the 


156 


N.    W.    HALSEY    &   CO. 


Revised    Statutes    shall    be    applicable    to 
authorized  and  directed  to  be  issued. 


the    certificates    herein 


Reserve  1 02.  (Sec.  5 1 86.)  Every  association  organized  for  the  purpose 
requirements  of  issuing  notes  payable  in  gold  shall  at  all  times  keep  on  hand 
for  gold  banks,  not  less  than  twenty-five  per  centum  of  its  outstanding  circulation, 
in  gold  or  silver  coin  of  the  United  States;  and  shall  receive  at  par 
in  the  payment  of  debts  the  gold  notes  of  every  other  such  associa- 
tion which  at  the  time  of  such  payment  is  redeeming  its  circulating 
notes  in  gold  coin  of  the  United  States,  and  shall  be  subject  to 
all  the  provisions  of  this  Title:  Provided,  That  in  applying  the  same 
to  associations  organized  for  issuing  gold  notes,  the  terms  "lawful 
money"  and  "lawful  money  of  the  United  States"  shall  be  con- 
strued to  mean  gold  or  silver  coin  of  the  United  States;  and  the 
circulation  of  such  association  shall  not  be  within  the  limitation 
of  circulation  mentioned  in  this  Title. 

Reserve  deposit  \03.  (Sec.  5195.)  Each  association  organized  in  any  of  the 
in  central  c^es  named  in  section  fifty-one  hundred  and  ninety-one  may  keep 
reserve  city.  one_half  of  its  lawful-money  reserve  in  cash  deposits  in  the  city  of 
New  York.  But  the  foregoing  provision  shall  not  apply  to  associa- 
tions organized  and  located  in  the  city  of  San  Francisco  for  the 
purpose  of  issuing  notes  payable  in  gold.  This  section  shall  not 
relieve  any  association  from  its  liability  to  redeem  its  circulating 
notes  at  its  own  counter  at  par  in  lawful  money  on  demand. 

104.  Sec.  1  of  the  act  of  March  3,  1887,  as  amended  by 
the  act  of  March  3,  1903,  provides  that  whenever  three-fourths 
in  number  of  the  national  banks  located  in  any  city  of  the  United 
States  having  a  population  of  twenty-five  thousand  people  shall 
make  application  to  the  Comptroller  of  the  Currency,  in  writing, 
asking  that  the  name  of  the  city  in  which  such  banks  are  located 
shall  be  added  to  the  cities  named  in  sections  fifty-one  hundred 
and  ninety-one  and  fifty-one  hundred  and  ninety-two  of  the  Revised 
Statutes,  the  Comptroller  shall  have  authority  to  grant  such  request, 
and  every  bank  located  in  such  city  shall  at  all  times  thereafter 
have  on  hand,  in  lawful  money  of  the  United  States,  an  amount 
equal  to  at  least  twenty-five  per  centum  of  its  deposits,  as  provided 
in  sections  fifty-one  hundred  and  ninety-one  and  fifty-one  hundred 
and  ninety-five  of  the  Revised  Statutes. 


Additional 
reserve  cities. 


NATIONAL    BANK   ACT  157 


105.  Sec.  2  of  the  act  of  March  3,  1887,  provides  that  when-   Additional 
ever  three-fourths  in  number  of  the  national  banks  located  in  any   central  reserve 
city   of   the   United   States   having   a   population   of   two   hundred   cities. 
thousand  people  shall  make  application  to  the  Comptroller  of  the 

Currency,  in  writing,  asking  that  such  city  may  be  a  central  reserve 
city,  like  the  city  of  New  York,  in  which  one-half  of  the  lawful- 
money  reserve  of  the  national  banks  located  in  other  reserve  cities 
may  be  deposited,  as  provided  in  section  fifty-one  hundred  and 
ninety-five  of  the  Revised  Statutes,  the  Comptroller,  shall  have 
authority,  with  the  approval  of  the  Secretary  of  the  Treasury, 
to  grant  such  request,  and  every  bank  located  in  such  city  shall 
at  all  times  thereafter  have  on  hand,  in  lawful  money  of  the  United 
States,  twenty-five  per  centum  of  its  deposits,  as  provided  in  section 
fifty-one  hundred  and  ninety-one  of  the  Revised  Statutes. 

106.  (Sec.  5137.)     A  national  banking  association  may  pur-   Real  estate. 
chase,  hold,  and  convey  real  estate  for  the  following  purposes,  and 

for  no  others: 

First.  Such  as  shall  be  necessary  for  its  immediate  accommodation 
in  the  transaction  of  its  business. 

Second.  Such  as  shall  be  mortgaged  to  it  in  good  faith  by  way 
of  security  for  debts  previously  contracted. 

Third.  Such  as  shall  be  conveyed  to  it  in  satisfaction  of  debts 
previously  contracted  in  the  course  of  its  dealings. 

Fourth.  Such  as  it  shall  purchase  at  sales  under  judgments, 
decrees,  or  mortgages  held  by  the  association,  or  shall  purchase 
to  secure  debts  due  to  it. 

But  no  such  association  shall  hold  the  possession  of  any  real 
estate  under  mortgage,  or  the  title  and  possession  of  any  real  estate 
purchased  to  secure  any  debts  due  to  it,  for  a  longer  period  than 
five  years. 

1 07.  (Sec.  5 1 97.)      Any  association  may  take,  receive,  reserve.    Interest. 
and  charge  on  any  loan  or  discount  made,  or  upon  any  note,  bill 

of  exchange,  or  other  evidence  of  debt,  interest  at  the  rate  allowed 
by  the  laws  of  the  State,  Territory,  or  District  where  the  bank 
is  located,  and  no  more,  except  that  where  by  the  laws  of  any  State 
a  different  rate  is  limited  for  banks  of  issue  organized  under  State 


158  N.    W.    HALSEY   &   CO. 

laws,  the  rate  so  limited  shall  be  allowed  for  associations  organized 
or  existing  in  any  such  State  under  this  Title.  When  no  rate  is 
fixed  by  the  laws  of  the  State,  or  Territory,  or  District,  the  bank 
may  take,  receive,  reserve,  or  charge  a  rate  not  exceeding  seven 
per  centum,  and  such  interest  may  be  taken  in  advance,  reckoning 
the  days  from  which  the  note,  bill,  or  other  evidence  of  debt  has 
to  run.  And  the  purchase,  discount,  or  sale  of  a  bona  fide  bill 
of  exchange,  payable  at  another  place  than  the  place  of  such  pur- 
chase, discount,  or  sale,  at  not  more  than  the  current  rate  of 
exchange  for  sight  drafts  in  addition  to  the  interest,  shall  not  be 
considered  as  taking  or  receiving  a  greater  rate  of  interest. 

Penalty  for  10&.  (Sec.  5198.)  The  taking,  receiving,  reserving,  or  charg- 
unlatvful  interest.  m§  a  rate  or"  interest  greater  than  is  allowed  by  the  preceding  section, 
when  knowingly  done,  shall  be  deemed  a  forfeiture  of  the  entire 
interest  which  the  note,  bill,  or  other  evidence  of  debt  carries  with  it, 
or  which  has  been  agreed  to  be  paid  thereon.  In  case  the  greater 
rate  of  interest  has  been  paid,  the  person  by  whom  it  has  been  paid, 
or  his  legal  representatives,  may  recover  back,  in  an  action  in  the 
nature  of  an  action  of  debt,  twice  the  amount  of  the  interest  thus 
paid  from  the  association  taking  or  receiving  the  same,  provided 
such  action  is  commenced  within  two  years  from  the  time  the 
usurious  transaction  occurred. 

Surplus  and  1 09.  (Sec.  5 1 99.)  The  directors  of  any  association  may  semi- 
dividends.  annually  declare  a  dividend  of  so  much  of  the  net  profits  of  the 
association  as  they  shall  judge  expedient;  but  each  association  shall, 
before  the  declaration  of  a  dividend,  carry  one-tenth  part  of  its 
net  profits  of  the  preceding  half  year  to  its  surplus  fund  until  the 
same  shall  amount  to  twenty  per  centum  of  its  capital  stock. 

Restriction  on  110.  (Sec.  5200,  as  amended  June  22,  1906.)  The  total 
loans,  liabilities  to  any  association,  of  any  person,  or  of  any  company, 
corporation,  or  firm  for  money  borrowed,  including  in  the  liabilities 
of  a  company  or  firm  the  liabilities  of  the  several  members  thereof, 
shall  at  no  time  exceed  one-tenth  part  of  the  amount  of  the  capital 
stock  of  such  association,  actually  paid  in  and  unimpaired  and  one- 
tenth  part  of  its  unimpaired  surplus  fund:  Provided,  however,  That 
the  total  of  such  liabilities  shall  in  no  event  exceed  thirty  per  centum 


NATIONAL   BANK   ACT 159 

of  the  capital  stock  of  the  association.  But  the  discount  of  bills 
of  exchange  drawn  in  good  faith  against  actually  existing  values,  and 
the  discount  of  commercial  or  business  paper  actually  owned  by 
the  person  negotiating  the  same  shall  not  be  considered  as  money 
borrowed. 

111.      (Sec.   5201.)      No  association  shall  make  any  loan  or   Associations 
discount  on  the  security  of  the  shares  of  its  own  capital  stock,  nor   must  not  hold 
be  the  purchaser  or  holder  of  any  such  shares,  unless  such  security    their  own  stock- 
or  purchase  shall  be  necessary  to  prevent  loss  upon  a  debt  previously 
contracted    in    good    faith;    and    stock    so    purchased    or    acquired 
shall  within  six  months  from  the  time  of  its  purchase,  be  sold  or 
disposed  of   at  public  or  private   sale;     or,   in   default   thereof,    a 
receiver  may  be  appointed  to  close  up  the  business  of  the  association, 
according  to  section  fifty-two  hundred  and  thirty-four. 

I  1 2.      (Sec.  5202.)      No  association  shall  at  any  time  be  in-   Restriction  on 
debted,  or  in  any  way  liable,  to  an  amount  exceeding  the  amount    fcants'  liability. 
of   its   capital   stock  at  such   time   actually  paid  in   and   remaining 
undiminished  by  losses  or  otherwise,  except  on  account  of  demands 

of  the  nature  following: 

First.      Notes  of  circulation. 

Second.     Moneys  deposited  with  or  collected  by  the  association. 

Third.      Bills  of  exchange  or  drafts  drawn  against  money  actually 
on  deposit  to  the  credit  of  the  association,  or  due  thereto. 

Fourth.       Liabilities  to  the  stockholders  of  the  association  for  div- 
idends and  reserve  profits. 

I I  3.      (Sec.  5203.)      No  association  shall,  either  directly  or  in-   Improper  use  oj 
directly,  pledge  or  hypothecate  any  of  its  notes  of  circulation  for   hank  circulation. 
the  purpose  of  procuring  money  to  be  paid  in  on  its  capital  stock, 

or  to  be  used  in  its  banking  operations,  or  otherwise;  nor  shall  any 
association  use  its  circulating  notes,  or  any  part  thereof,  in  any 
manner  or  form,  to  create  or  increase  its  capital  stock. 

114.      (Sec.   5204.)      No  association,  or  any  member  thereof,  Untarr\ed 

shall,  during  the  time  it  shall  continue  its  banking  operations,  with-  dividends 

draw,  or  permit  to  be  withdrawn,  either  in  the  form  of  dividends  prohibited. 
or  otherwise,   any  portion  of   its   capital.      If   losses  have   at   any 


160 N.    W.    HALSEY    &   CO. 

time  been  sustained  by  any  such  association  equal  to  or  exceeding  in 
undivided  profits  then  on  hand,  no  dividend  shall  be  made;  and  no 
dividend  shall  ever  be  made  by  any  association,  while  it  continues 
its  banking  operations,  to  an  amount  greater  than  its  net  profits 
then  on  hand,  deducting  therefrom  its  losses  and  bad  debts.  All 
debts  due  to  any  association,  on  which  interest  is  past  due  and 
unpaid  for  a  period  of  six  months,  unless  the  same  are  well  secured, 
and  in  process  of  collection,  shall  be  considered  bad  debts  within  the 
meaning  of  this  section.  But  nothing  in  this  section  shall  prevent 
the  reduction  of  the  capital  stock  of  the  association  under  section 
fifty-one  hundred  and  forty-three. 

Assessment  for  1  15.  (Sec.  5205.)  Every  association  which  shall  have  failed 
impairment  of  to  pay  up  its  capital  stock,  as  required  by  law,  and  every  associa- 
capital.  tion  whose  capital  stock  shall  have  become  impaired  by  losses  or 
otherwise,  shall,  within  three  months  after  receiving  notice  thereof 
from  the  Comptroller  of  the  Currency,  pay  the  deficiency  in  the 
capital  stock,  by  assessment  upon  the  shareholders  pro  rata  for  the 
amount  of  capital  stock  held  by  each;  and  the  Treasurer  of  the 
United  States  shall  withhold  the  interest  upon  all  bonds  held  by 
him  in  trust  for  any  such  association,  upon  notification  from  the 
Comptroller  of  the  Currency,  until  otherwise  notified  by  him.  If  any 
such  association  shall  fail  to  pay  up  its  capital  stock,  and  shall  refuse 
to  go  into  liquidation,  as  provided  by  law,  for  three  months  after 
receiving  notice  from  the  Comptroller,  a  receiver  may  be  appointed 
to  close  up  the  business  of  the  association,  according  to  the  provisions 
of  section  fifty-two  hundred  and  thirty-four. 

Provision  for  1 1 6.  Sec.  4  of  the  act  of  June  30,  1 876,  provides  that  if  any 
enforcement  of  shareholder  or  shareholders  of  a  bank  shall  neglect  or  refuse,  after 
assessment,  three  months'  notice,  to  pay  the  assessment,  as  provided  in  this 
section,  it  shall  be  the  duty  of  the  board  of  directors  to  cause  a 
sufficient  amount  of  the  capital  stock  of  such  shareholder  or  share* 
holders  to  be  sold  at  public  auction  (after  thirty  days*  notice  shall 
be  given  by  posting  such  notice  of  sale  in  the  office  of  the  bank  and 
by  publishing  such  notice  in  a  newspaper  of  the  city  or  town  in 
which  the  bank  is  located,  or  in  a  newspaper  published  nearest 
thereto)  to  make  good  the  deficiency;  and  the  balance,  if  any,  shall 
be  returned  to  such  delinquent  shareholder  or  shareholders. 


NATIONAL   BANK   ACT  161 

1  1  7.      (Sec.  5206.)      No  association  shall  at  any  time  pay  out  Prohibition 
on  loans  or  discounts,  or  in  purchasing  drafts  or  bills  of  exchange,    against  uncurrent 
or  in  payment  of  deposits,  or  in  any  other  mode  pay  or  put  in   notes. 
circulation  the  notes  of  any  bank  or  banking  association  which  are 
not,  at  any  such  time,  receivable,  at  par,  on  deposit,  and  in  payment 
of  debts  by  the  association  so  paying  out  or  circulating  such  notes; 
nor  shall   any  association  knowingly  pay  out  or  put  in  circulation 
any  notes  issued  by  any  bank  or  banking  association  which  at  the 
time  of  such  paying  out  or  putting  in  circulation  is  not  redeeming  its 
circulating  notes  in  lawful  money  of  the  United  States. 

1  1 8.  (Sec.  52 1 0.)  The  president  and  cashier  of  every  national  £,"sf  0j 
banking  association  shall  cause  to  be  kept  at  all  times  a  full  and  shareholders. 
correct  list  of  the  names  and  residences  of  all  the  shareholders  in 
the  association,  and  the  number  of  shares  held  by  each,  in  the  office 
where  its  business  is  transacted.  Such  lists  shall  be  subject  to  the 
inspection  of  all  the  shareholders  and  creditors  of  the  association, 
and  the  officers  authorized  to  assess  taxes  under  State  authority, 
during  business  hours  of  each  day  in  which  business  may  be 
legally  transacted.  A  copy  of  such  list,  on  the  first  Monday  of  July 
of  each  year,  verified  by  the  oath  of  such  president  or  cashier,  shall 
be  transmitted  to  the  Comptroller  of  the  Currency. 

119.  (Sec.  5211.)  Every  association  shall  make  to  the  Reports  of 
Comptroller  of  the  Currency  not  less  than  five  reports  during  each  condition. 
year,  according  to  the  form  which  may  be  prescribed  by  him,  verified 
by  the  oath  or  affirmation  of  the  president  or  cashier  of  such  associa- 
tion, and  attested  by  the  signature  of  at  least  three  of  the  directors. 
Each  such  report  shall  exhibit,  in  detail  and  under  appropriate 
heads,  the  resources  and  liabilities  of  the  association  at  the  close  of 
business  on  any  past  day  by  him  specified,  and  shall  be  transmitted 
to  the  Comptroller  within  five  days  after  the  receipt  of  a  request 
or  requisition  therefor  from  him,  and  in  the  same  form  in  which  it 
is  made  to  the  Comptroller  shall  be  published  in  a  newspaper 
published  in  the  place  where  such  association  is  established,  or  if 
there  is  no  newspaper  in  the  place,  then  in  one  published  nearest 
thereto  in  the  same  county,  at  the  expense  of  the  association;  and 
such  proof  of  publication  shall  be  furnished  as  may  be  required 
by  the  Comptroller.      The  Comptroller   shall   also  have  power   to 


162 


N.    W.    HAU3EY    &   CO. 


call  for  special  reports  from  any  particular  association  whenever  in 
his  judgment  the  same  are  necessary  in  order  to  a  full  and  complete 
knowledge  of  its  condition. 

Verification  of  120.      The  act  of  February  26,  1881,  provides  that  the  oath  or 

such  reports,  affirmation  required  by  section  fifty-two  hundred  and  eleven  of  the 
Revised  Statutes,  verifying  the  returns  made  by  national  banks 
to  the  Comptroller  of  the  Currency,  when  taken  before  a  notary 
public  properly  authorized  and  commissioned  by  the  State  in  which 
such  notary  resides  and  the  bank  is  located,  or  any  other  officer 
having  an  official  seal,  authorized  in  such  State  to  administer  oaths, 
shall  be  a  sufficient  verification  as  contemplated  by  said  section  fifty- 
two  hundred  and  eleven:  Provided,  That  the  officer  administering 
the  oath  is  not  an  officer  of  the  bank. 

Reports  of         \2.\,      (Sec.  5212.)      In  addition  to  the  reports  required  by  the 

dividends  and    preceding  section,   each  association  shall  report  to   the  Comptroller 

earnings.    °^  *ne  Currency,  within  ten  days  after  declaring  any  dividend,  the 

amount  of  such  dividend  and  the  amount  of  net  earnings  in  excess 

of  such  dividend.     Such  reports  shall  be  attested  by  the  oath  of 

the  president  or  cashier  of  the  association. 


Penalty  for 
failure  to  report. 


122.  (Sec.  5213.)  Every  association  which  fails  to  make  and 
transmit  any  report  required  under  either  of  the  two  preceding 
sections  shall  be  subject  to  a  penalty  of  one  hundred  dollars  for 
each  day  after  the  periods,  respectively,  therein  mentioned,  that  it 
delays  to  make  and  transmit  its  report.  Whenever  any  association 
delays  or  refuses  to  pay  the  penalty  herein  imposed,  after  it  has 
been  assessed  by  the  Comptroller  of  the  Currency,  the  amount 
thereof  may  be  retained  by  the  Treasurer  of  the  United  States, 
upon  the  order  of  the  Comptroller  of  the  Currency,  out  of  the 
interest,  as  it  may  become  due  to  the  association,  on  the  bonds 
deposited  with  him  to  secure  circulation.  All  sums  of  money 
collected  for  penalties  under  this  section  shall  be  paid  into  the 
Treasury  of  the  United  States. 

Reports  of         1 23.     Sec.   6  of  the  act  of  June   30,    1876,   as  amended  by 

other  banks.    acts  °f  March  3,    1901,   and  June   30,    1902,  provides   that   all 

banks  or  savings  companies  or  institutions  organized  under  authority 

of  any  act  of  Congress  to  do  business  in  the  District  of  Columbia 


NATIONAL    BANK   ACT 163 

shall  be,  and  are  hereby,  required  to  make  to  the  Comptroller 
of  the  Currency,  and  publish,  all  the  reports  which  national  banking 
associations  are  required  to  make  and  publish,  under  the  provisions 
of  sections  fifty-two  hundred  and  eleven,  fifty-two  hundred  and 
twelve,  and  fifty-two  hundred  and  thirteen  of  the  Revised  Statutes, 
and  shall  be  subject  to  the  same  penalties  for  failure  to  make  or 
publish  such  reports  as  are  therein  provided,  which  penalties  may  be 
collected  by  suit  before  the  supreme  court  of  the  District  of 
Columbia. 

124.  (Sec.  5219.)      Nothing  herein  shall  prevent  all  the  shares    State  taxation  of 
in   any   association    from   being   included   in   the   valuation   of   the     national  banks. 
personal  property  of  the  owner  or  holder  of  such  shares,  in  assessing 

taxes  imposed  by  authority  of  the  State  within  which  the  association 
is  located;  but  the  legislature  of  each  State  may  determine  and 
direct  the  manner  and  place  of  taxing  all  the  shares  of  national 
banking  associations  located  within  the  State,  subject  only  to  the  two 
restrictions,  that  the  taxation  shall  not  be  at  a  greater  rate  than  is 
assessed  upon  other  moneyed  capital  in  the  hands  of  individual 
citizens  of  such  State,  and  that  the  shares  of  any  national  banking 
association  owned  by  nonresidents  of  any  State  shall  be  taxed  in 
the  city  or  town  where  the  bank  is  located,  and  not  elsewhere. 
Nothing  herein  shall  be  construed  to  exempt  the  real  property  of 
associations  from  either  State,  county,  or  municipal  taxes,  to  the 
same  extent,  according  to  its  value,  as  other  real  property  is  taxed. 

125.  (Sec.  5240.)     The  Comptroller  of  the  Currency,  with  the    National-bank 
approval  of  the  Secretary  of  the  Treasury,  shall,  as  often  as  shall  be     examiners. 
deemed  necessary  or  proper,   appoint  a  suitable  person  or  persons 

to  make  an  examination  of  the  affairs  of  every  banking  association, 
who  shall  have  power  to  make  a  thorough  examination  into  all 
the  affairs  of  the  association,  and  in  doing  so  to  examine  any  of  the 
officers  and  agents  thereof  on  oath;  and  shall  make  a  full  and 
detailed  report  of  the  condition  of  the  association  to  the  Comptroller. 

126.  (Sec.  5240.)      But  no  person  shall  be  appointed  to  ex-     Qualification  for 
amine   the   affairs   of    any   banking    association   of   which   he   is    a     examiner. 
director  or  other  officer. 


164 N.    W.    HALSEY    &   CO. 

Compensation  \27.  (Sec.  5240.)  All  persons  appointed  to  be  examiners  of 
of  examiners,  national  banks  not  located  in  the  redemption  cities  specified  in  section 
five  thousand  one  hundred  and  ninety-two  of  the  Revised  Statutes 
of  the  United  States,  or  in  any  one  of  the  States  of  Oregon,  Cali- 
fornia, and  Nevada,  or  in  the  Territories,  shall  receive  compensation 
for  such  examination  as  follows:  For  examining  national  banks 
having  a  capital  less  than  one  hundred  thousand  dollars,  twenty 
dollars;  those  having  a  capital  of  one  hundred  thousand  dollars 
and  less  than  three  hundred  thousand  dollars,  twenty-five  dollars; 
those  having  a  capital  of  three  hundred  thousand  dollars  and  less 
than  four  hundred  thousand  dollars,  thirty-five  dollars;  those  having 
a  capital  of  four  hundred  thousand  dollars  and  less  than  five  hundred 
thousand  dollars,  forty  dollars;  those  having  a  capital  of  five 
hundred  thousand  dollars  and  less  than  six  hundred  thousand  dollars, 
fifty  dollars;  those  having  a  capital  of  six  hundred  thousand  dollars 
and  over,  seventy-five  dollars;  which  amounts  shall  be  assessed 
by  the  Comptroller  of  the  Currency  upon,  and  paid  by,  the 
respective  association  so  examined,  and  shall  be  in  lieu  of  the 
compensation  and  mileage  heretofore  allowed  for  making  said 
examinations;  and  persons  appointed  to  make  examinations  of 
national  banks  in  the  cities  named  in  section  five  thousand  one 
hundred  and  ninety-two  of  the  Revised  Statutes  of  the  United  States, 
or  in  any  one  of  the  States  of  Oregon,  California,  and  Nevada,  or 
in  the  Territories,  shall  receive  such  compensation  as  may  be  fixed 
by  the  Secretary  of  the  Treasury  upon  the  recommendation  of  the 
Comptroller  of  the  Currency;  and  the  same  shall  be  assessed  and 
paid  in  the  manner  hereinbefore  provided. 

Examinations  1  28.  (Sec.  332.)  The  Comptroller  of  the  Currency,  in  addition 
in  District  of  to  the  powers  conferred  upon  him  by  law  for  the  examination  of 
Columbia,  national  banks,  is  further  authorized,  whenever  he  may  deem  it  use- 
ful, to  cause  examination  to  be  made  into  the  condition  of  any  bank 
in  the  District  of  Columbia  organized  under  act  of  Congress.  The 
Comptroller,  at  his  discretion,  may  report  to  Congress  the  results  of 
such  examination.  The  expense  necessarily  incurred  in  any  such 
examination  shall  be  paid  out  of  any  appropriation  made  by  Congress 
for  special  bank  examinations. 


NATIONAL   BANK   ACT  165 

129.  (Sec.  5241.)      No  association  shall  be  subject  to  any  Limitation  of 
visitorial  powers  other  than  such  as  are  authorized  by  this  Title,  visitorial  potters. 
or  are  vested  in  the  courts  of  justice. 

130.  (Sec.  5243.)      All  banks  not  organized  and  transacting  Use  of 
business  under  the  national  currency  laws,  or  under  this  Title,  and  all  "National"  in 
persons  or  corporations  doing  the  business  of  bankers,  brokers,   or  titles. 
savings    institutions,    except   savings    banks    authorized   by    Congress 

to  use  the  word  "national"  as  a  part  of  their  corporate  name,  are 
prohibited  from  using  the  word  "national"  as  a  portion  of  the  name 
or  title  of  such  bank,  corporation,  firm,  or  partnership;  and  any 
violation  of  this  prohibition  committed  after  the  third  day  of 
September,  eighteen  hundred  and  seventy-three,  shall  subject  the 
party  chargeable  therewith  to  a  penalty  of  fifty  dollars  for  each  day 
during  which  it  is  permitted  or  repeated. 

Chapter  Six. 
EXTENSION   OF  CORPORATE   EXISTENCE. 

131.  The  act  of  July  12,  1882,  provides:  (Sec.  1)    That  any  Corporate 
national  banking  association  organized  under  the  acts  of  February  existence  may  be 
twenty-fifth,  eighteen  hundred  and  sixty-three,  June  third,  eighteen  extended. 
hundred  and  sixty-four,  and  February  fourteenth,  eighteen  hundred 

and  eighty,  or  under  sections  fifty-one  hundred  and  thirty-three,  fifty- 
one  hundred  and  thirty-four,  fifty-one  hundred  and  thirty-five,  fifty- 
one  hundred  and  thirty-six,  and  fifty-one  hundred  and  fifty-four  of 
the  Revised  Statutes  of  the  United  States,  may,  at  any  time  within 
the  two  years  next  previous  to  the  date  of  the  expiration  of  its  cor- 
porate existence  under  present  law,  and  with  the  approval  of  the 
Comptroller  of  the  Currency,  to  be  granted  as  hereinafter  provided, 
extend  its  period  of  succession  by  amending  its  articles  of  association 
for  a  term  of  not  more  than  twenty  years  from  the  expiration  of  the 
period  of  succession  named  in  said  articles  of  association,  and  shall 
have  succession  for  such  extended  period,  unless  sooner  dissolved  by 
the  act  of  shareholders  owning  two  thirds  of  its  stock,  or  unless  its 
franchise  becomes  forfeited  by  some  violation  of  law,  or  unless  here- 
after modified  or  repealed. 


166 


N.    W.    HALSEY    &   CO. 


Consent  of  '  32      (Sec.  2.)     That  such  amendment  of  said  articles  of  associa- 

two-thirds  ti°n  snall  be  authorized  by  the  consent  in  writing  of  shareholders  own- 
necessary.  mS  n°t  less  than  two-thirds  of  the  capital  stock  of  the  association ;  and 
the  board  of  directors  shall  cause  such  consent  to  be  certified  under  the 
seal  of  the  association,  by  its  president  or  cashier,  to  the  Comptroller 
of  the  Currency,  accompanied  by  an  application  made  by  the  president 
or  cashier  for  the  approval  of  the  amended  articles  of  association  by 
the  Comptroller;  and  such  amended  articles  of  association  shall  not 
be  valid  until  the  Comptroller  shall  give  to  such  association  a  certifi- 
cate under  his  hand  and  seal  that  the  association  has  complied  with 
all  the  provisions  required  to  be  complied  with  and  is  authorized  to 
have  succession  for  the  extended  period  named  in  the  amended 
articles  of  association. 

Special  1  33.  (Sec.  3.)  That  upon  the  receipt  of  the  application  and  cer- 
examination  tificate  of  the  association  provided  for  in  the  preceding  section,  the 
of  bank'  Comptroller  of  the  Currency  shall  cause  a  special  examination  to  be 
made,  at  the  expense  of  the  association,  to  determine  its  condition ;  and 
if  after  such  examination  or  otherwise  it  appears  to  him  that  said 
association  is  in  a  satisfactory  condition,  he  shall  grant  his  certificate 
of  approval  provided  for  in  the  preceding  section,  or  if  it  appears 
that  the  condition  of  said  association  is  not  satisfactory,  he  shall 
withhold  such  certificate  of  approval. 

Status  not  1  34.  (Sec.  4.)  That  any  association  so  extending  the  period 
changed  fep  of  its  succession  shall  continue  to  enjoy  all  the  rights  and  privileges 
extension,  and  immunities  granted  and  shall  continue  to  be  subject  to  all  the 
duties,  liabilities,  and  restrictions  imposed  by  the  Revised  Statutes 
of  the  United  States  and  other  acts  having  reference  to  national 
banking  associations,  and  it  shall  continue  to  be  in  all  respects  the 
identical  association  it  was  before  the  extension  of  its  period  of 
succession. 

Dissenting         135.      (Sec.  5.)      That  when  any  national  banking  association 
shareholders    has  amended  its  articles  of  association  as  provided  in  this  act,  and 
may  withdraw,     the  Comptroller  has  granted  his  certificate  of  approval,  any  share- 
holder not  assenting  to  such  amendment  may  give  notice  in  writing 
to  the  directors,  within  thirty  days  from  the  date  of  the  certificate 
of   approval,   of  his   desire  to   withdraw   from   said   association,   in 


NATIONAL    BANK   ACT \67 

which  case  he  shall  be  entitled  to  receive  from  said  banking  asso- 
ciation the  value  of  the  shares  so  held  by  him,  to  be  ascertained 
by  an  appraisal  made  by  a  committee  of  three  persons,  one  to  be 
selected  by  such  shareholder,  one  by  the  directors,  and  the  third 
by  the  first  two;  and  in  case  the  value  so  fixed  shall  not  be 
satisfactory  to  any  such  shareholder,  he  may  appeal  to  the  Comp- 
troller of  the  Currency,  who  shall  cause  a  reappraisal  to  be  made, 
which  shall  be  final  and  binding;  and  if  said  reappraisal  shall 
exceed  the  value  fixed  by  said  committee,  the  bank  shall  pay  the 
expenses  of  said  reappraisal,  and  otherwise  the  appellant  shall  pay 
said  expenses;  and  the  value  so  ascertained  and  determined  shall 
be  deemed  to  be  a  debt  due,  and  be  forthwith  paid,  to  said  share- 
holder, from  said  bank;  and  the  shares  so  surrendered  and 
appraised  shall,  after  due  notice,  be  sold  at  public  sale,  within 
thirty  days  after  the  final  appraisal  provided  in  this  section: 
Provided,  that  in  the  organization  of  any  banking  association 
intended  to  replace  any  existing  banking  association,  and  retaining 
the  name  thereof,  the  holders  of  stock  in  the  expiring  association 
shall  be  entitled  to  preference  in  the  allotment  of  the  shares  of  the 
new  association  in  proportion  to  the  number  of  shares  held  by 
them  respectively  in  the  expiring  association. 

136.  The  act  of  Congress,  approved  April  12,  1902,  provides  Re-extension  of 
that  the  Comptroller  of  the  Currency  is  hereby  authorized  in  the   corporate 
manner  provided  by,   and  under  the  conditions   and   limitations  of   existence. 

the  act  of  July  1 2,  1  882,  to  extend  for  a  further  period  of  twenty 
years  the  charter  of  any  national  banking  association  extended 
under  said  act  which  shall  desire  to  continue  its  existence  after 
the  expiration  of  its  charter. 

Chapter  Seven. 
LIQUIDATION    AND   RECEIVERSHIP. 

137.  (Sec.  5220.)      Any  association  may  go  into  liquidation    Two-thirds  vote 
and  be  closed  by  the  vote   of  its   shareholders  owning   two-thirds    required  for 

of  its  stock.  liquidation. 


168  N.    W.    HALSEY    &   CO. 

Notice  of  138.  (SEC.  5221.)  Whenever  a  vote  is  taken  to  go  into 
voluntary  liquidation  it  shall  be  the  duty  of  the  board  of  directors  to  cause 
liquidation,  notice  of  this  fact  to  be  certified,  under  the  seal  of  the  association, 
by  its  president  or  cashier,  to  the  Comptroller  of  the  Currency, 
and  the  publication  thereof  to  be  made  for  a  period  of  two  months 
in  a  newspaper  published  in  the  city  of  New  York,  and  also  in  a 
newspaper  published  in  the  city  or  town  in  which  the  association 
is  located,  or  if  no  newspaper  is  there  published,  then  in  the 
newspaper  published  nearest  thereto,  that  the  association  is  closing 
up  its  affairs,  and  notifying  the  holders  of  its  notes  and  other 
creditors  to  present  the  notes  and  other  claims  against  the  association 
for    payment. 

Deposit  of  1 39.  (Sec.  5222.)  Within  six  months  from  the  date  of  the 
lawful  money,  vote  to  go  into  liquidation  the  association  shall  deposit  with  the 
Treasurer  of  the  United  States  lawful  money  of  the  United  States 
sufficient  to  redeem  all  its  outstanding  circulation.  The  Treasurer 
shall  execute  duplicate  receipts  for  money  thus  deposited,  and 
deliver  one  to  the  association  and  the  other  to  the  Comptroller  of 
the  Currency,  stating  the  amount  received  by  him,  and  the  purpose 
for  which  it  has  been  received;  and  the  money  shall  be  paid  into 
the  Treasury  of  the  United  States,  and  placed  to  the  credit  of 
such  association  upon  redemption  account 

No  deposit        140.      (Sec.   5223.)      An  association  which  is  in  good   faith 

required  for    winding  up  its  business  for  the  purpose  of  consolidating  with  another 

consolidation,    association   shall   not  be   required  to  deposit  lawful  money   for  its 

outstanding  circulation;  but  its  assets  and  liabilities  shall  be  reported 

by  the  association  with  which  it  is  in  process  of  consolidation. 

Bonds  of  141.  (Sec.  5224.)  Whenever  a  sufficient  deposit  of  lawful 
liquidating  money  to  redeem  the  outstanding  circulation  of  an  asso- 
banks.  ciation  proposing  to  close  its  business  has  been  made,  the 
bonds  deposited  by  the  association  to  secure  payment  of 
its  notes  shall  be  reassigned  to  it,  in  the  manner  prescribed 
by  section  fifty-one  hundred  and  sixty-two.  And  there- 
after the  association  and  its  shareholders  shall  stand  dis- 
charged from  all  liabilities  upon  the  circulating  notes,  and 


NATIONAL   BANK   ACT 169 

those  notes  shall  be  redeemed  at  the  Treasury  of  the 
United  States.  And  if  any  such  bank  shall  fail  to  make 
the  deposit  and  take  up  its  bonds  for  thirty  days  after 
the  expiration  of  the  time  specified,  the  Comptroller  of 
the  Currency  shall  have  power  to  sell  the  bonds  pledged 
for  the  circulation  of  said  bank  at  public  auction  in  New 
York  City,  and,  after  providing  for  the  redemption  and 
cancellation  of  said  circulation,  and  the  necessary  expenses 
of  the  sale,  to  pay  over  any  balance  remaining  to  the  bank 
or  its  legal  representatives. 

1 42.  Sec.  7  of  the  act  of  July  1 2,  1 882,  provides  that  Banks  whose 
national  banking  associations  whose  corporate  existence  has  expired  existence  has 
or.  shall   hereafter  expire,   and   which   do   not   avail   themselves   of   expired. 

the  provisions  of  this  act,  shall  be  required  to  comply  with  the 
provisions  of  sections  fifty-two  hundred  and  twenty-one  and  fifty-two 
hundred  and  twenty-two  of  the  Revised  Statutes  in  the  same 
manner  as  if  the  shareholders  had  voted  to  go  into  liquidation, 
as  provided  in  section  fifty-two  hundred  and  twenty  of  the  Revised 
Statutes;  and  the  provisions  of  sections  fifty-two  hundred  and 
twenty-four  and  fifty-two  hundred  and  twenty-five  of  the  Revised 
Statutes  shall  also  be  applicable  to  such  associations,  except  as 
modified  by  this  act;  and  the  franchise  of  such  associations  is 
hereby  extended  for  the  sole  purpose  of  liquidating  their  affairs 
until  such  affairs  are  finally  closed. 

143.  (Sec.  5226.)    Whenever  any  national  banking  association   Protest  of  bank 
fails  to  redeem  in  the  lawful  money  of  the  United  States  any  of   circulation. 

its  circulating  notes,  upon  demand  of  payment  duly  made  during 
the  usual  hours  of  business,  at  the  office  of  such  association,  the 
holder  may  cause  the  same  to  be  protested,  in  one  package  by  a 
notary  public,  unless  the  president  or  cashier  of  the  association 
whose  notes  are  presented  for  payment  offers  to  waive  demand  and 
notice  of  the  protest,  and,  in  pursuance  of  such  offer,  makes,  signs, 
and  delivers  to  the  party  making  such  demand  an  admission  in 
writing,  stating  the  time  of  the  demand,  the  amount  demanded, 
and  the  fact  of  the  nonpayment  thereof.  The  notary  public,  on 
making    such    protest,    or    upon    receiving    such    admission,     shall 


170  N.    W.    HALSEY    &   CO. 


forthwith  forward  such  admission  or  notice  of  protest  to  the  Comp- 
troller of  the  Currency,  retaining  a  copy  thereof.  If,  however, 
satisfactory  proof  is  produced  to  the  notary  public  that  the  payment 
of  the  notes  demanded  is  restrained  by  order  of  any  court  of 
competent  jurisdiction,  he  shall  not  protest  the  same.  When  the 
holder  of  any  notes  causes  more  than  one  note  or  package  to  be 
protested  on  the  same  day,  he  shall  not  receive  pay  for  more  than 
one  protest. 

Bonds  forfeited  144.  (Sec.  5227.)  On  receiving  notice  that  any  national 
if  circulation  banking  association  has  failed  to  redeem  any  of  its  circu- 
is  dishonored,  lating  notes,  as  specified  in  the  preceding  section,  the 
Comptroller  of  the  Currency,  with  the  concurrence  of  the 
Secretary  of  the  Treasury,  may  appoint  a  special  agent, 
of  whose  appointment  immediate  notice  shall  be  given  to 
such  association,  who  shall  immediately  proceed  to  ascer- 
tain whether  it  has  refused  to  pay  its  circulating  notes  in 
the  lawful  money  of  the  United  States,  when  demanded, 
and  shall  report  to  the  Comptroller  the  fact  so  ascertained. 
If  from  such  protest,  and  the  report  so  made,  the  Comp- 
troller is  satisfied  that  such  association  has  refused  to  pay 
its  circulating  notes  and  is  in  default,  he  shall,  within 
thirty  days  after  he  has  received  notice  of  such  failure, 
declare  the  bonds  deposited  by  such  association  forfeited 
to  the  United  States,  and  they  shall  thereupon  be  so 
forfeited. 

Bank  may  1 45.  (Sec.  5237.)  Whenever  an  association  against  which 
enjoin  further  proceedings  have  been  instituted,  on  account  of  any  alleged  refusal 
proceedings,  to  redeem  its  circulating  notes  as  aforesaid,  denies  having  failed 
to  do  so,  it  may,  at  any  time  within  ten  days  after  it  has  been 
notified  of  the  appointment  of  an  agent,  as  provided  in  section 
fifty-two  hundred  and  twenty-seven,  apply  to  the  nearest  circuit, 
or  district,  or  Territorial  court  of  the  United  States  to  enjoin  further 
proceedings  in  the  premises;  and  such  court,  after  citing  the  Comp- 
troller of  the  Currency  to  show  cause  why  further  proceedings 
should  not  be  enjoined,  and  after  the  decision  of  the  court  or  finding 
of   the   jury    that   such   association   has   not   refused   to   redeem   its 


NATIONAL    BANK   ACT  171 


circulating  notes,  when  legally  presented,  in  the  lawful  money  of 
the  United  States,  shall  make  an  order  enjoining  the  Comptroller, 
and  any  receiver  acting  under  his  direction,  from  all  further  pro- 
ceedings on  account  of  such  alleged  refusal. 

146.  (Sec.   736.)      All  proceedings  by  any  national  banking  Where 
association   to   enjoin   the  Comptroller   of   the   Currency,   under   the  proceedings 
provisions  of  any  law  relating  to  national  banking  associations,  shall  must  be  brought. 
be  had  in  the  district  where  such  association  is  located. 

147.  (Sec.  5228.)  After  a  default  on  the  part  of  an  asso-  Suspension  of 
ciation  to  pay  any  of  its  circulating  notes  has  been  ascertained  business  after 
by  the  Comptroller,   and  notice  thereof  has  been  given  by  him  to   default. 

the  association,  it  shall  not  be  lawful  for  the  association  suffering 
the  same  to  pay  out  any  of  its  notes,  discount  any  notes  or  bills, 
or  otherwise  prosecute  the  business  of  banking,  except  to  receive 
and  safely  keep  money  belonging  to  it,  and  to  deliver  special 
deposits. 

1 48.  (Sec.  5229.)    Immediately  upon  declaring  the  bonds  Notice  to  present 
of  an  association  forfeited  for  nonpayment   of   its  notes,   circulation  for 
the  Comptroller  shall  give  notice,  in  such  manner  as  the   redemption. 
Secretary  of  the  Treasury  shall,  by  general  rules  or  other- 
wise direct,  to  the  holders  of  the  circulating  notes  of  such 
association,  to  present  them  for  payment  at  the  Treasury 

of  the  United  States;  and  the  same  shall  be  paid  as 
presented  in  lawful  money  of  the  United  States;  where- 
upon the  Comptroller  may,  in  his  discretion,  cancel  an 
amount  of  bonds  pledged  by  such  association  equal  at 
current  market  rates,  not  exceeding  par,  to  the  notes  paid. 

1 49.  (Sec.  5230.)    Whenever  the  Comptroller  has  become  Bonds  sold  at 
satisfied,    by    the    protest    or    the    waiver    and    admission  public  auction. 
specified  in  section  fifty-two  hundred  and  twenty-six,  or 

by  the  report  provided  for  in  section  fifty-two  hundred 
and  twenty-seven,  that  any  association  has  refused  to  pay 
its  circulating  notes,  he  may,  instead  of  canceling  its 
bonds,  cause  so  much  of  them  as  may  be  necessary  to 
redeem  its  outstanding  notes  to  be  sold  at  public  auction 


172  N.    W.    HALSEY    &   CO. 

in  the  city  of  New  York,  after  giving  thirty  days'  notice 
of  such  sale  to  the  association. 

First  Hen  for  150.  (Sec.  5230.)  For  any  deficiency  in  the  proceeds  of  all 
redeeming  tne  bonds  of  an  association,  when  thus  sold,  to  reimburse  to  the 
circulation.  United  States  the  amount  expended  in  paying  the  circulating  notes 
of  the  association,  the  United  States  shall  have  a  paramount  lien 
upon  all  its  assets;  and  such  deficiency  shall  be  made  good  out  of 
such  assets  in  preference  to  any  and  all  other  claims  whatsoever, 
except  the  necessary  costs  and  expenses  of  administering  the  same. 

Bonds  sold  at  151.  (Sec.  523 1 .)  The  Comptroller  may,  if  he  deems  it 
private  sale,  for  the  interest  of  the  United  States,  sell  at  private  sale 
any  of  the  bonds  of  an  association  shown  to  have  made 
default  in  paying  its  notes,  and  receive  therefor  either 
money  or  the  circulating  notes  of  the  association.  But 
no  such  bonds  shall  be  sold  by  private  sale  for  less  than 
par,  nor  for  less  than  the  market  value  thereof  at  the  time 
of  sale;  and  no  sales  of  any  such  bonds,  either  public  or 
private,  shall  be  complete  until  the  transfer  of  the  bonds 
shall  have  been  made  with  the  formalities  prescribed  by 
sections  fifty-one  hundred  and  sixty-two,  fifty-one  hundred 
and  sixty-three,  and  fifty-one  hundred  and  sixty-four. 

Appointment  152.  (Sec.  5234.)  On  becoming  satisfied,  as  specified  in  sec- 
and  duties  of  tions  fifty-two  hundred  and  twenty-six  and  fifty-two  hundred  and 
receiver,  twenty-seven,  that  any  association  has  refused  to  pay  its  circulating 
notes  as  therein  mentioned,  and  is  in  default,  the  Comptroller  of 
the  Currency  may  forthwith  appoint  a  receiver,  and  require  of  him 
such  bond  and  security  as  he  deems  proper.  Such  receiver,  under 
the  direction  of  the  Comptroller,  shall  take  possession  of  the  books, 
records,  and  assets  of  every  description  of  such  association,  collect 
all  debts,  dues,  and  claims  belonging  to  it,  and,  upon  the  order  of  a 
court  of  record  of  competent  jurisdiction,  may  sell  or  compound  all 
bad  or  doubtful  debts,  and,  on  a  like  order,  may  sell  all  the  real  and 
personal  property  of  such  association,  on  such  terms  as  the  court 
shall  direct;  and  may,  if  necessary  to  pay  the  debts  of  such 
association,  enforce  the  individual  liability  of  the  stockholders.  Such 
receiver  shall   pay   over   all   money   so  made   to   the   Treasurer  of 


NATIONAL   BANK   ACT 173 

the  United  States,  subject  to  the  order  of  the  Comptroller,  and 
also  make  report  to  the  Comptroller  of  all  his  acts  and  proceedings. 

153.  Sec.  1  of  the  act  of  June  30,  1876,  provides  that  when-    When  receiver 
ever   any  national   banking   association   shall   be   dissolved,    and   its    map  be 
rights,   privileges,    and    franchises   declared    forfeited,    as  prescribed    appointed. 

in  section  fifty-two  hundred  and  thirty-nine  of  the  Revised  Statutes 
of  the  United  States,  or  whenever  any  creditor  of  any  national 
banking  association  shall  have  obtained  a  judgment  against  it  in 
any  court  of  record,  and  made  application,  accompanied  by  a 
certificate  from  the  clerk  of  the  court  stating  that  such  judgment 
has  been  rendered  and  has  remained  unpaid  for  the  space  of 
thirty  days,  or  whenever  the  Comptroller  shall  become  satisfied 
of  the  insolvency  of  the  national  banking  association,  he  may,  after 
due  examination  of  its  affairs,  in  either  case,  appoint  a  receiver, 
who  shall  proceed  to  close  up  such  association,  and  enforce  the 
personal  liability  of  the  shareholders,  as  provided  in  section  fifty- 
two  hundred  and  thirty-four  of  said  statute. 

A  receiver  may  also  be  appointed,  under  the  provisions  of 
section  fifty-two  hundred  and  thirty-four  of  the  Revised  Statutes 
of  the  United  States,  for  the  following  violations  of  law: 

Where  the  capital  stock  of  a  national  bank  has  not  been  fully 
paid  in  and  it  is  thus  reduced  below  the  legal  minimum  and 
remains  so  for  thirty  days.      (Sec.  5141,  R.  S.) 

For  failure  to  make  good  the  lawful-money  reserve  within  thirty 
days  after  notice.      (Sec.  5191,  R.  S.) 

Where  a  bank  purchases  or  acquires  its  own  stock,  to  prevent 
loss  upon  a  debt  previously  contracted  in  good  faith,  and  the  same 
is  not  sold  or  disposed  of  within  six  months  from  the  time  of  its 
purchase.      (Sec.  5201,  R.  S.) 

For  failure  to  make  good  any  impairment  in  its  capital  stock 
and  refusing  to  go  into  liquidation  within  three  months  after 
receiving  notice.      (Sec.  5205,  R.  S.) 

For  false  certification  of  checks  by  any  officer,  clerk,  or  agent. 

(Sec.  5208,  R.  S.)  .,  ,.     , 

Notice  to 

154.  (Sec.  5235.)      The  Comptroller  shall,  upon  appointing  a    creditors  of 
receiver,    cause    notice    to    be    given,    by    advertisement    in    such    insolvent  banks. 


174 N.    W.    HALSEY    &   CO. 

newspapers  as  he  may  direct,  for  three  consecutive  months,  calling  on 
all  persons  who  may  have  claims  against  such  association  to  present 
the  same  and  to  make  legal  proof  thereof. 

Distribution  of  155.  (Sec.  5236.)  From  time  to  time,  after  full  provision  has 
assets  of  been  first  made  for  refunding  to  the  United  States  any  deficiency 
insolvent  banks,  in  redeeming  the  notes  of  such  association,  the  Comptroller  shall 
make  a  ratable  dividend  of  the  money  so  paid  over  to  him  by 
such  receiver  on  all  such  claims  as  may  have  been  proved  to  his 
satisfaction  or  adjudicated  in  a  court  of  competent  jurisdiction,  and, 
as  the  proceeds  of  the  assets  of  such  association  are  paid  over  to 
him,  shall  make  further  dividends  on  all  claims  previously  proved 
or  adjudicated;  and  the  remainder  of  the  proceeds,  if  any,  shall 
be  paid  over  to  the  shareholders  of  such  association,  or  their  legal 
representatives,  in  proportion  to  the  stock  by  them  respectively  held. 

Expenses  of  156.  (Sec.  5238.)  All  fees  for  protesting  the  notes  issued  by 
receivership —  any  national  banking  association  shall  be  paid  by  the  person 
how  paid,  procuring  the  protest  to  be  made,  and  such  association  shall  be 
liable  therefor;  but  no  part  of  the  bonds  deposited  by  such  asso- 
ciation shall  be  applied  to  the  payment  of  such  fees.  All  expenses 
of  any  preliminary  or  other  examinations  into  the  condition  of  any 
association  shall  be  paid  by  such  association.  All  expenses  of 
any  receivership  shall  be  paid  out  of  the  assets  of  such  association 
before  distribution  of  the  proceeds  thereof. 

Forfeiture  of  157.  (Sec.  5239.)  If  the  directors  of  any  national  banking 
charier,  association  shall  knowingly  violate,  or  knowingly  permit  any  of 
the  officers,  agents,  or  servants  of  the  association  to  violate,  any 
of  the  provisions  of  this  Title,  all  the  rights,  privileges,  and  fran- 
chises of  the  association  shall  be  thereby  forfeited.  Such  violation 
shall,  however,  be  determined  and  adjudged  by  a  proper  circuit, 
district,  or  Territorial  court  of  the  United  States,  in  a  suit  brought 
for  that  purpose  by  the  Comptroller  of  the  Currency,  in  his  own 
name,  before  the  association  shall  be  declared  dissolved. 

Individual        158.      (Sec.    5239.)      And    in    case    of    such   violation    every 

liability  of  director  who  participated  in  or  assented  to  the  same  shall  be  held 

directors,  liable    in   his    personal    and    individual    capacity    for    all    damages 


NATIONAL   BANK   ACT 175 

which  the  association,   its  shareholders,  or   any  other  person   shall 
have  sustained  in  consequence  of  such  violation. 

159.     The  act  of  March  29,  1886,  provides:  (Sec.   I.)    That  Receiver  may 
whenever  the  receiver  of  any  national  bank  duly  appointed  by  the  purchase  property 
Comptroller  of  the  Currency,   and  who  shall  have  duly   qualified   to  protect  his 
and  entered  upon  the   discharge  of  his  trust,   shall   find   it  in  his  trust. 
opinion   necessary,    in   order   to   fully   protect   and   benefit   his   said 
trust,   to  the   extent  of   any  and   all  equities  that  such   trust  may 
have  in  any  property,   real  or  personal,   by   reason  of   any   bond, 
mortgage,  assignment,  or  other  proper  legal  claim  attaching  thereto, 
and  which  said  property  is  to  be  sold  under  any  execution,  decree 
of   foreclosure,    or  proper   order  of   any   court   of   jurisdiction,   he 
may  certify  the  facts  in  the  case,   together  with  his  opinion  as  to 
the  value  of  the  property  to  be  sold  and  the  value  of  the  equity 
his  said  trust  may  have  in   the  same,   to  the   Comptroller  of   the 
Currency,   together  with  a  request  for  the  right   and   authority   to 
use  and  employ  so  much  of  the  money  of  said  trust  as  may  be 
necessary  to  purchase  such  property  at  such  sale. 

Sec.  2.  That  such  request,  if  approved  by  the  Comptroller  of 
the  Currency,  shall  be,  together  with  the  certificate  of  facts  in  the 
case  and  his  recommendation  as  to  the  amount  of  money  which  in 
his  judgment  should  be  so  used  and  employed,  submitted  to  the 
Secretary  of  the  Treasury,  and  if  the  same  shall  likewise  be 
approved  by  him  the  request  shall  be  by  the  Comptroller  of  the 
Currency  allowed,  and  notice  thereof,  with  copies  of  the  request, 
certificate  of  facts,  and  indorsement  of  approvals,  shall  be  filed 
with  the  Treasurer  of  the  United  States. 

Sec.  3.  That  whenever  any  such  request  shall  be  allowed  as 
hereinbefore  provided,  the  said  Comptroller  of  the  Currency  shall 
be,  and  is,  empowered  to  draw  upon  and  from  such  funds  of  any 
such  trust  as  may  be  deposited  with  the  Treasurer  of  the  United 
States  for  the  benefit  of  the  bank  in  interest  to  the  amount  as  may 
be  recommended  and  allowed  and  for  the  purpose  for  which  such 
allowance  was  made:  Provided,  however,  That  all  payments  to  be 
made  for  or  on  account  of  the  purchase  of  any  such  property  and 
under  any  such  allowance  shall  be  made  by  the  Comptroller  of  the 


176 N.    W.    HALSEY    &   CO. 

Currency  direct,  with  the  approval  of  the  Secretary  of  the  Treasury, 
for  such  purpose  only  and  in  such  manner  as  he  may  determine 
and  order. 

Taxes  on         160.      The  act  of  March  1,   1879,  provides  that  whenever  and 

insolvent    after  any  bank  has  ceased  to  do  business  by  reason  of  insolvency 

national  banks    or  bankruptcy  no  tax  shall  be  assessed  or  collected,  or  paid  into 

remitted,    the  Treasury  of  the  United  States,  on  account  of  such  bank,  which 

shall  diminish  the  assets  thereof  necessary  for  the  full  payment  of 

all  its  depositors;  and  such  tax  shall  be  abated  from  such  national 

banks   as   are    found   by   the   Comptroller   of   the   Currency    to   be 

insolvent;    and   the   Commissioner   of    Internal    Revenue,    when    the 

facts  shall  so  appear  to  him,  is  authorized  to  remit  so  much  of  said 

tax  against  insolvent  State  and  savings  banks  as  shall  be  found  to 

affect  the  claims  of  their  depositors. 

Appointment  161.  Sec.  3  of  the  act  of  June  30,  1876,  as  amended  by  acts 
and  qualification  of  August  3,  1892,  and  March  2,  1897,  provides  that  whenever 
of  shareholders'  any  association  shall  have  been  or  shall  be  placed  in  the  hands 
agent,  of  a  receiver,  as  provided  in  section  fifty-two  hundred  and  thirty- 
four  and  other  sections  of  the  Revised  Statutes  of  the  United 
States,  and  when,  as  provided  in  section  fifty-two  hundred  and 
thirty-six  thereof,  the  Comptroller  of  the  Currency  shall  have  paid  to 
each  and  every  creditor  of  such  association,  not  including  share- 
holders who  are  creditors  of  such  association,  whose  claim  or 
claims  as  such  creditors  shall  have  been  proved  or  allowed  as  therein 
prescribed,  the  full  amount  of  such  claims,  and  all  expenses  of 
the  receivership  and  the  redemption  of  the  circulating  notes  of  such 
association  shall  have  been  provided  for  by  depositing  lawful  money 
of  the  United  States  with  the  Treasurer  of  the  United  States,  the 
Comptroller  of  the  Currency  shall  call  a  meeting  of  the  share- 
holders of  such  association  by  giving  notice  thereof  for  thirty  days 
in  a  newspaper  published  in  the  town,  city,  or  county  where  the 
business  of  such  association  was  carried  on,  or  if  no  newspaper  is 
there  published,  in  the  newspaper  published  nearest  thereto.  At 
such  meeting  the  shareholders  shall  determine  whether  the  receiver 
shall  be  continued  and  shall  wind  up  the  affairs  of  such  association, 
or  whether  an  agent  shall  be  elected  for  that  purpose,  and  in  so 
determining   the  said   shareholders   shall  vote   by   ballot,   in  person 


NATIONAL   BANK   ACT 177 

or  by  proxy,  each  share  of  stock  entitling  the  holder  to  one  vote, 
and  the  majority  of  the  stock  in  value  and  number  of  shares  shall  be 
necessary  to  determine  whether  the  said  receiver  shall  be  continued, 
or  whether  an  agent  shall  be  elected.  In  case  such  majority  shall 
determine  that  the  said  receiver  shall  be  continued,  the  said 
receiver  shall  thereupon  proceed  with  the  execution  of  his  trust, 
and  shall  sell,  dispose  of,  or  otherwise  collect  the  assets  of  the 
said  association,  and  shall  possess  all  the  powers  and  authority, 
and  be  subject  to  all  the  duties  and  liabilities  originally  conferred 
or  imposed  upon  him  by  his  appointment  as  such  receiver,  so  far 
as  the  same  remain  applicable.  In  case  the  said  meeting  shall, 
by  the  vote  of  a  majority  of  the  stock  in  value  and  number  of 
shares,  determine  that  an  agent  shall  be  elected,  the  said  meeting 
shall  thereupon  proceed  to  elect  an  agent,  voting  by  ballot,  in 
person  or  by  proxy,  each  share  of  stock  entitling  the  holder  to 
one  vote,  and  the  person  who  shall  receive  votes  representing  at 
least  a  majority  of  stock  in  value  and  number  shall  be  declared 
the  agent  for  the  purposes  hereinafter  provided;  and  whenever  any 
of  the  shareholders  of  the  association  shall,  after  the  election  of 
such  agent,  have  executed  and  filed  a  bond  to  the  satisfaction  of 
the  Comptroller  of  the  Currency,  conditioned  for  the  payment  and 
discharge  in  full  of  each  and  every  claim  that  may  hereafter  be 
proved  and  allowed  by  and  before  a  competent  court,  and  for  the 
faithful  performance  of  all  and  singular  the  duties  of  such  trust, 
the  Comptroller  and  the  receiver  shall  thereupon  transfer  and 
deliver  to  such  agent  all  the  undivided  or  uncollected  or  other  assets 
of  such  association  then  remaining  in  the  hands  or  subject  to  the 
order  and  control  of  said  Comptroller  and  said  receiver,  or  either 
of  them;  and  for  this  purpose  said  Comptroller  and  said  receiver 
are  hereby  severally  empowered  and  directed  to  execute  any  deed, 
assignment,  transfer,  or  other  instrument  in  writing  that  may  be 
necessary  and  proper;  and  upon  the  execution  and  delivery  of 
such  instrument  to  the  said  agent  the  said  Comptroller  and  the  said 
receiver  shall  by  virtue  of  this  act  be  discharged  from  any  and 
all  liabilities  to  such  association  and  to  each  and  all  the  creditors 
and  shareholders  thereof. 


178 N.    W.    HALSEY    &   CO. 

Duties  of  1 62.  Sec.  3  of  the  act  of  June  30,  1 876,  as  amended  by 
shareholders'  acts  of  August  3,  1892,  and  March  2,  1897,  provides:  Upon 
agent,  receiving  such  deed,  assignment,  transfer,  or  other  instrument,  the 
person  elected  such  agent  shall  hold,  control,  and  dispose  of  the 
assets  and  property  of  such  association  which  he  may  receive  under 
the  terms  hereof  for  the  benefit  of  the  shareholders  of  such  asso- 
ciation, and  he  may,  in  his  own  name,  or  in  the  name  of  such 
association,  sue  and  be  sued  and  do  all  other  lawful  acts  and 
things  necessary  to  finally  settle  and  distribute  the  assets  and  prop- 
erty in  his  hands,  and  may  sell,  compromise,  or  compound  the 
debts  due  to  such  association,  with  the  consent  and  approval  of  the 
circuit  or  district  court  of  the  United  States  for  the  district  where 
the  business  of  such  association  was  carried  on,  and  shall  at  the 
conclusion  of  his  trust  render  to  such  district  or  circuit  court  a 
full  account  of  all  his  proceedings,  receipts,  and  expenditures  as 
such  agent,  which  court  shall,  upon  due  notice,  settle  and  adjust 
such  accounts  and  discharge  said  agent  and  the  sureties  upon  said 
bond.  And  in  case  any  such  agent  so  elected  shall  refuse  to  serve, 
or  die,  resign,  or  be  removed,  any  shareholder  may  call  a  meeting 
of  the  shareholders  of  such  association  in  the  town,  city,  or  village 
where  the  business  of  the  said  association  was  carried  on,  by 
giving  notice  thereof  for  thirty  days  in  a  newspaper  published  in  said 
town,  city,  or  village,  or  if  no  newspaper  is  there  published,  in 
the  newspaper  published  nearest  thereto,  at  which  meeting  the 
shareholders  shall  elect  an  agent,  voting  by  ballot,  in  person  or  by 
proxy,  each  share  of  stock  entitling  the  holder  to  one  vote,  and 
when  such  agent  shall  have  received  votes  representing  at  least  a 
majority  of  the  stock  in  value  and  number  of  shares,  and  shall 
have  executed  a  bond  to  the  shareholders  conditioned  for  the 
faithful  performance  of  his  duties,  in  the  penalty  fixed  by  the 
shareholders  at  said  meeting,  with  two  sureties,  to  be  approved 
by  a  judge  of  a  court  of  record,  and  file  said  bond  in  the  office 
of  the  clerk  of  a  court  of  record  in  the  county  where  the  business 
of  said  association  was  carried  on,  he  shall  have  all  the  rights, 
powers,  and  duties  of  the  agent  first  elected  as  hereinbefore  provided. 
At  any  meeting  held  as  hereinbefore  provided  administrators  or 
executors  of  deceased  shareholders  may  act  and  sign  as  the  decedent 
might  have   done  if   living,    and   guardians   of  minors   and   trustees 


NATIONAL   BANK   ACT  '  179 

of  other  persons  may  so  act  and  sign  for  their  ward  or  wards  or 
cestui  que  trust.  The  proceeds  of  the  assets  or  property  of  any 
such  association  which  may  be  undistributed  at  the  time  of  such 
meeting  or  may  be  subsequently  received  shall  be  distributed  as 
follows : 

"First.  To  pay  the  expenses  of  the  execution  of  the  trust  to  the 
date  of  such  payment. 

"Second.  To  repay  any  amount  or  amounts  which  have  been 
paid  in  by  any  shareholder  or  shareholders  of  such  association  upon 
and  by  reason  of  any  and  all  assessments  made  upon  the  stock 
of  such  association  by  the  order  of  the  Comptroller  of  the  Currency 
in  accordance  with  the  provisions  of  the  statutes  of  the  United 
States;  and 

"Third.  The  balance  ratably  among  such  stockholders,  in  pro- 
portion to  the  number  of  shares  held  and  owned  by  each.  Such 
distribution  shall  be  made  from  time  to  time  as  the  proceeds  shall 
be  received  and  as  shall  be  deemed  advisable  by  the  said  Comp- 
troller or  said  agent." 

163.  (Sec.  5242.)  All  transfers  of  the  notes,  bonds,  bills  of  Illegal  preference 
exchange,  or  other  evidences  of  debt  owing  to  any  national  banking  of  creditors. 
association,  or  of  deposits  to  its  credit;  all  assignments  of  mort- 
gages, sureties  on  real  estate,  or  of  judgments  or  decrees  in  its 
favor;  all  deposits  of  money,  bullion,  or  other  valuable  thing  for 
its  use,  or  for  the  use  of  any  of  its  shareholders  or  creditors;  and 
all  payments  of  money  to  either,  made  after  the  commission  of  an 
act  of  insolvency,  or  in  contemplation  thereof,  made  with  a  view 
to  prevent  the  application  of  its  assets  in  the  manner  prescribed  by 
this  chapter,  or  with  a  view  to  the  preference  of  one  creditor  to 
another,  except  in  payment  of  its  circulating  notes,  shall  be  utterly 
null  and  void.  No  attachment,  injunction,  or  execution  shall  be 
issued  against  such  association  or  its  property  before  final  judgment 
in  any  suit,  action,  or  proceeding  in  any  State,  county,  or  municipal 
court. 

1  64.     Sec.  2  of  the  act  of  June  30,   1 876,  provides  that  when    Creditor's  bill 
any   national   banking   association   shall   have   gone   into   liquidation    against 
under    the   provisions   of   section    five   thousand    two   hundred    and    shareholders. 


180  N.    W.    HALSEY    &   CO. 

twenty  of  said  statutes,  the  individual  liability  of  the  shareholders 
provided  for  by  section  fifty-one  hundred  and  fifty-one  of  said 
statutes  may  be  enforced  by  any  creditor  of  such  association,  by 
bill  in  equity  in  the  nature  of  a  creditor's  bill,  brought  by  such 
creditor  on  behalf  of  himself  and  of  all  other  creditors  of  the  asso- 
ciation, against  the  shareholders  thereof,  in  any  court  of  the  United 
States,  having  original  jurisdiction  in  equity  for  the  district  in 
which  such  association  may  have  been  located  or  established. 

Chapter  Eight. 
CRIMES,    JURISDICTION,    ETC. 

Penalty  for        165.      (Sec.  5187.)      No  officer  acting  under  the  provisions  of 

improper  jhjs  Title  shall  countersign  or  deliver  to  any  association,  or  to  any 

countersigning  otner   company   or   person,    any   circulating   notes    contemplated   by 

or  delivering  ^  T/itle,  except  in  accordance  with  the  true  intent  and  meaning 

nation.  Q^  -tg  provis;ons>     Every  officer  who  violates  this  section  shall  be 

deemed  guilty  of  a  high  misdemeanor,  and  shall  be  fined  not  more 

than    double    the    amount    so    countersigned    and    delivered,    and 

imprisoned  not  less  than  one  year  and  not  more  than  fifteen  years. 

Penalty  for        166.      (Sec.   5207.)      No   association  shall  hereafter  offer  or 

pledging  United   receive  United  States  notes   or   national-bank  notes   as   security   or 

States  notes  or    as  collateral  security  for  any  loan  of  money,  or  for  a  consideration 

bank  circulation,    agree  to  withhold  the  same  from  use,  or  offer  or  receive  the  custody 

or  promise  of  custody  of  such  notes   as   security,   or  as  collateral 

security,  or  consideration  for  any  loan  of  money.     Any  association 

offending    against    the   provisions   of   this   section    shall   be    deemed 

guilty   of   a  misdemeanor,    and   shall   be   fined  not  more   than   one 

thousand  dollars  and  a  further  sum  equal  to  one-third  of  the  money 

so  loaned.      The  officer  or  officers   of   any   association   who   shall 

make   any   such  loan   shall   be   liable   for   a   further  sum   equal   to 

one-quarter  of  the  money  loaned;  and  any  fine  or  penalty  incurred 

by  a  violation  of  this  section  shall  be  recoverable   for  the  benefit 

of  the  party  bringing  such  suit.     Sec.    12  of  the  act  of  July    12, 


NATIONAL    BANK   ACT  181 

1882,  provides  that  the  provisions  of  this  section  shall  apply  to 
the  United  States  certificates  of  gold  and  silver  coin. 

167.  (Sec.  5188).      It  shall  not  be  lawful  to  design,  engrave,  Penalty  for 
print,  or  in  any  manner  make  or  execute,  or  to  utter,  issue,  distribute,  imitating  banJ( 
circulate,  or  use  any  business  or  professional  card,  notice,  placard,  circulation  for 
circular,  handbill,  or  advertisement  in  the  likeness  or  similitude  of  advertising 
any  circulating  note  or  other  obligation  or  security  of  any  banking  purposes. 
association  organized  or  acting  under  the  laws  of  the  United  States 

which  has  been  or  may  be  issued  under  this  Title,  or  any  act  of 
Congress,  or  to  write,  print,  or  otherwise  impress  upon  any  such 
note,  obligation,  or  security  any  business  or  professional  card, 
notice,  or  advertisement,  or  any  notice  or  advertisement  of  any 
matter  or  thing  whatever.  Every  person  who  violates  this  section 
shall  be  liable  to  a  penalty  of  one  hundred  dollars,  recoverable 
one-half  to  the  use  of  the  informer. 

1 68.  (Sec.  5 1 89.)      Every  person  who  mutilates,  cuts,  defaces,  Penalty  for 
disfigures,  or  perforates  with  holes,   or  unites  or  cements  together,  mutilating 
or  does   any  other  thing  to   any  bank  bill,   draft,   note,   or  other  circulation. 
evidence  of  debt,   issued  by   any  national  banking   association,   or 

who  causes  or  procures  the  same  to  be  done,  with  intent  to  render 
such  bank  bill,  draft,  note,  or  other  evidence  of  debt  unfit  to  be 
reissued  by  said  association,  shall  be  liable  to  a  penalty  of  fifty 
dollars,  recoverable  by  the  association. 

169.  (Sec.  5415.)      Every  person  who  falsely  makes,  forges,  Penalty  for 
or    counterfeits,    or    causes    or   procures    to    be   made,    forged,    or  counterfeiting 
counterfeited,  or  willingly  aids  or  assists  in  falsely  making,  forging,  circulation. 
or  counterfeiting,  any  note  in  imitation  of,  or  purporting  to  be  in 

imitation  of,  the  circulating  notes  issued  by  any  banking  association 
now  or  hereafter  authorized  and  acting  under  the  laws  of  the 
United  States;  or  who  passes,  utters,  or  publishes,  or  attempts  to 
pass,  utter,  or  publish,  any  false,  forged,  or  counterfeited  note 
purporting  to  be  issued  by  any  such  association  doing  a  banking 
business,  knowing  the  same  to  be  falsely  made,  forged,  or  counter- 
feited, or  who  falsely  alters,  or  causes,  or  procures  to  be  falsely 
altered,    or   willingly    aids    or   assists   in    falsely    altering   any    such 


182 


N.    W.    HALSEY    &   CO. 


circulating  notes,  or  passes,  utters,  or  publishes,  or  attempts  to  pass, 
utter,  or  publish  as  true,  any  falsely  altered  or  spurious  circulating 
note  issue,  or  purporting  to  have  been  issued,  by  any  such  banking 
association,  knowing  the  same  to  be  falsely  altered  or  spurious, 
shall  be  imprisoned  at  hard  labor  not  less  than  five  years  nor  more 
than  fifteen  years,   and  fined  not  more  than  one  thousand  dollars. 

What  are  170.  (Sec.  5413.)  The  words  "obligation  or  other  security  of 
obligations  of  the  United  States"  shall  be  held  to  mean  all  bonds,  certificates  of 
the  United  States,  indebtedness,  national-bank  currency,  coupons,  United  States  notes, 
Treasury  notes,  fractional  notes,  certificates  of  deposit,  bills,  checks, 
or  drafts  for  money  drawn  by  or  upon  authorized  officers  of  the 
United  States,  stamps  and  other  representatives  of  value,  or  what- 
ever denomination,  which  have  been  or  may  [be]  issued  under 
any  act  of  Congress. 

Penalty  for  171.  (Sec.  5430.)  Every  person  having  control,  custody,  or 
illegal  possession  of  any  plate,  or  any  part  thereof,  from  which  has  been 
possession  or  printed,  or  which  may  be  prepared  by  direction  of  the  Secretary 
use  of  material  Qf  ^e  Treasury  for  the  purpose  of  printing,  any  obligation  or  other 
for  circulation.  securjty  Df  the  United  States,  who  uses  such  plate,  or  knowingly 
suffers  the  same  to  be  used  for  the  purpose  of  printing  any  such 
or  similar  obligation,  or  other  security,  or  any  part  thereof,  except 
as  may  be  printed  for  use  of  the  United  States  by  order  of  the 
proper  officer  thereof;  and  every  person  who  engraves,  or  causes 
or  procures  to  be  engraved,  or  assists  in  engraving,  any  plate  in 
the  likeness  of  any  plate  designed  for  the  printing  of  such  obligation 
or  other  security,  or  who  sells  any  such  plate,  or  who  brings  into 
the  United  States  from  any  foreign  place  any  such  plate,  except 
under  the  direction  of  the  Secretary  of  the  Treasury  or  other 
proper  officer,  or  with  any  other  intent,  in  either  case,  than  that  such 
plate  be  used  for  the  printing  of  the  obligations  or  other  securities 
of  the  United  States;  or  who  has  in  his  control,  custody,  or 
possession  any  metallic  plate  engraved  after  the  similitude  of  any 
plate  from  which  any  such  obligation  or  other  security  has  been 
printed,  with  intent  to  use  such  plate,  or  suffer  the  same  to  be  used 
in  forging  or  counterfeiting  any  such  obligation  or  other  security, 
or   any   part   thereof;    or   who    has    in   his   possession   or    custody, 


NATIONAL   BANK   ACT  183 

except  under  authority  from  the  Secretary  of  the  Treasury  or  other 
proper  officer,  any  obligation  or  other  security,  engraved  and 
printed  after  the  similitude  of  any  obligation  or  other  security  issued 
under  the  authority  of  the  United  States,  with  intent  to  sell  or 
otherwise  use  the  same;  and  every  person  who  prints,  photographs, 
or  in  any  other  manner  makes  or  executes,  or  causes  to  be  printed, 
photographed,  made,  or  executed,  or  aids  in  printing,  photographing, 
making,  or  executing  any  engraving,  photograph,  print,  or  impression 
in  the  likeness  of  any  such  obligation  or  other  security,  or  any  part 
thereof,  or  who  sells  any  such  engraving,  photograph,  print,  or 
impression,  except  to  the  United  States,  or  who  brings  into  the 
United  States  from  any  foreign  place  any  such  engraving  photo- 
graph, print,  or  impression,  except  by  direction  of  some  proper 
officer  of  the  United  States,  or  who  has  or  retains  in  his  control 
or  possession,  after  a  distinctive  paper  has  been  adopted  by  the 
Secretary  of  the  Treasury  for  the  obligations  and  other  securities 
of  the  United  States,  any  similar  paper  adapted  to  the  making  of 
any  such  obligation  or  other  security,  except  under  the  authority  of 
the  Secretary  of  the  Treasury  or  some  other  proper  officer  of  the 
United  States,  shall  be  punished  by  a  fine  of  not  more  than  five 
thousand  dollars,  or  by  imprisonment  at  hard  labor  not  more  than 
fifteen  years,  or  by  both. 

172.  (Sec.  5431.)     Every  person  who,  with  intent  to  defraud,  Penally  for 
passes,  utters,  publishes,  or  sells,  or  attempts  to  pass,  utter,  publish,  passing 

or  sell,  or  brings  into  the  United  States  with  intent  to  pass,  publish,  counterfeit 
utter,  or  sell,  or  keeps  in  possession  or  conceals,  with  like  intent,  any  circulation. 
falsely  made,   forged,  counterfeited,  or  altered  obligation,  or  other 
security  of  the  United  States,  shall  be  punished  by  a  fine  of  not 
more  than  five  thousand  dollars  and  by  imprisonment  at  hard  labor 
not  more  than  fifteen  years. 

173.  (Sec.  5432.)     Every  person  who,  without  authority  from  Penalty  for 
the  United  States,  takes,  procures,  or  makes,  upon  lead,  foil,  wax,   taking 
plaster,  paper,   or  any  other  substance  or  material,   an  impression,  unauthorized 
stamp,  or  imprint  of,   form,  or  by  the  use  of,   any  bedplate,  bed-  impressions  of 
piece,  die,  roll,  plate,  seal,   type,  or  other  tool,   implement,   instru-   tools. 

ment,  or  thing  used  or  fitted,  or  intended  to  be  used,  in  printing, 


184  N.    W.    HALSEY    &   CO. 

< 

stamping,  or  impressing,  or  in  making  other  tools,  implements, 
instruments,  or  things,  to  be  used,  or  fitted  or  intended  to  be  used, 
in  printing,  stamping,  or  impressing  any  kind  or  description  of  obliga- 
tion or  other  security  of  the  United  States,  now  authorized  or  hereafter 
to  be  authorized  by  the  United  States,  or  circulating  note  or  evidence 
of  debt  of  any  banking  association  under  the  laws  thereof,  shall  be 
punished  by  imprisonment  at  hard  labor  not  more  than  ten  years, 
or  by  a  fine  of  not  more  than  five  thousand  dollars,  or  both. 

Penalty  for  1  74.  (Sec.  5433.)  Every  person  who,  with  intent  to  defraud, 
having  such  has  in  his  possession,  keeping,  custody,  or  control,  without  authority 
impressions,  from  the  United  States,  any  imprint,  stamp,  or  impression,  taken  or 
made  upon  any  substance  or  material  whatsoever,  of  any  tool, 
implement,  instrument,  or  thing  used,  or  fitted,  or  intended  to  be  used 
for  any  of  the  purposes  mentioned  in  the  preceding  section;  or  who, 
with  intent  to  defraud,  sells,  gives,  or  delivers  any  such  imprint, 
stamp,  or  impression  to  any  other  person,  shall  be  punished  by 
imprisonment  at  hard  labor  not  more  than  ten  years,  or  by  a  fine  of 
not  more  than  five  thousand  dollars. 

Penalty  for         175.      (Sec.  5434.)      Every  person  who  buys,  sells,  exchanges, 

dealing  in    transfers,   receives,   or  delivers  any  false,   forged,   counterfeited,   or 

counterfeit    altered  obligation  or  other  security  of  the  United  States,  or  circu- 

circulation.    lating  note  of   any  banking  association   organized   or  acting  under 

the  laws  thereof,  which  has  been  or  may  hereafter  be  issued   by 

virtue  of   any  act  of  Congress,   with  the   intent  that   the   same   be 

passed,  published,  or  used  as  true  and  genuine,  shall  be  imprisoned 

at  hard   labor  not  more   than   ten   years,   or   fined   not   more   than 

five  thousand  dollars,  or  both. 

Penalty  for         176.      (Sec.  5437.)      In  all  cases  where  the  charter  of  any  cor- 

issuing   poration  which  has   been  or  may   be   created  by  act  of  Congress 

circulation    nas   expired   or   may   hereafter   expire,    if   any   director,   officer,    or 

of  expired    agent  of  the  corporation,   or  any  trustee  thereof,  or  any  agent  of 

associations.    sucn  trustee,  or  any  person  having  in  his  possession   or  under  his 

control  the  property  of  the  corporation  for  the  purpose  of  paying 

or   redeeming  its  notes   and  obligations,    knowingly   issues,   reissues, 

or  utters  as  money,  or  in  any  other  way  knowingly  puts  in  circulation 

any  bill,   note,   check,  draft,  or  other   security  purporting   to  have 


NATIONAL   BANK   ACT 


185 


been  made  by  any  such  corporation  whose  charter  has  expired, 
or  by  any  officer  thereof,  or  purporting  to  have  been  made  under 
authority  derived  therefrom,  or  if  any  person  knowingly  aids  in 
any  such  act,  he  shall  be  punished  by  a  fine  of  not  more  than  ten 
thousand  dollars,  or  by  imprisonment  not  less  than  one  year  nor 
more  than  five  years,  or  by  both  such  fine  and  imprisonment.  But 
nothing  herein  shall  be  construed  to  make  it  unlawful  for  any 
person,  not  being  such  director,  officer,  or  agent  of  the  corporation, 
or  any  trustee  thereof,  or  any  agent  of  such  trustee,  or  any  person 
having  in  his  possession  or  under  his  control  the  property  of  the 
corporation  for  the  purpose  hereinbefore  set  forth,  who  has  received 
or  may  hereafter  receive  such  bill,  note,  check,  draft,  or  other 
security,  bona  fide  and  in  the  ordinary  transactions  of  business,  to 
utter  as  money  and  otherwise  circulate  the  same. 

1  77.  (Sec.  5208.)  It  shall  be  unlawful  for  any  officer,  clerk,  pa[se  certification 
or  agent  of  any  national  banking  association  to  certify  any  check  0*  c/,ecA>5# 
drawn  upon  the  association  unless  the  person  or  company  drawing 
the  check  has  on  deposit  with  the  association,  at  the  time  such 
check  is  certified,  an  amount  of  money  equal  to  the  amount  specified 
in  such  check.  Any  check  so  certified  by  duly  authorized  officers 
shall  be  a  good  and  valid  obligation  against  the  association;  but  the 
act  of  any  officer,  clerk,  or  agent  of  any  association,  in  violation  of 
this  section,  shall  subject  such  bank  to  the  liabilities  and  proceedings 
on  the  part  of  the  Comptroller  as  provided  for  in  section  fifty-two 
hundred  and  thirty-four. 


178.     Sec.  13  of  the  act  of  July  12,  1882,  provides  that  any    p      ,.    , 
officer,    clerk,   or   agent   of   any   national   banking   association   who     ,  ?     cer/;*ca/,on 
shall   willfully   violate   the   provisions   of   section    fifty-two   hundred    Qt  cnechs 
and  eight  of  the  Revised  Statutes  of  the  United  States,  or  who  shall 
resort  to  any  device,  or  receive  any  fictitious  obligations,  direct  or 
collateral,   in  order  to  evade  the  provisions  thereof,  or  who  shall 
certify  checks  before  the  amount  thereof  shall  have  been  regularly 
entered  to  the  credit  of  the  dealer  upon  the  books  of  the  banking 
association,   shall   be   deemed   guilty   of   a   misdemeanor   and   shall, 
on  conviction  thereof  in  any  circuit  or  district  court  of  the  United 
States,  be  fined  not  more  than  five  thousand  dollars,   or  shall   be 


186 N.    W.    HALSEY    fr   CO. 

imprisoned  not  more  than  five  years,  or  both,  in  the  discretion  of 
the   court. 

Penalty  for  179.  (Sec.  5209.)  Every  president,  director,  cashier,  teller, 
official  clerk,  or  agent  of  any  association  who  embezzles,  abstracts,  or 
malfeasance,  willfully  misapplies  any  of  the  moneys,  funds,  or  credits  of  the 
association,  or  who,  without  authority  from  the  directors,  issues 
or  puts  in  circulation  any  of  the  notes  of  the  association;  or  who, 
without  such  authority,  issues  or  puts  forth  any  certificate  of  deposit, 
draws  any  order  or  bill  of  exchange,  makes  any  acceptance,  assigns 
any  note,  bond,  draft,  bill  of  exchange,  mortgage,  judgment,  or 
decree;  or  who  makes  any  false  entry  in  any  book,  report,  or 
statement  of  the  association,  with  intent,  in  either  case,  to  injure 
or  defraud  the  association  or  any  other  company,  body  politic  or 
corporate,  or  any  individual  person,  or  to  deceive  any  officer  of  the 
association  or  any  agent  appointed  to  examine  the  affairs  of  any 
such  association;  and  every  person  who  with  like  intent  aids  or 
abets  any  officer,  clerk,  or  agent  in  any  violation  of  this  section, 
shall  be  deemed  guilty  of  a  misdemeanor,  and  shall  be  imprisoned 
not  less  than  five  years  nor  more  than  ten. 

Jurisdiction  of         180.      (Sec.    629.)      The    circuit    courts    shall    have    original 

circuit  courts    jurisdiction     of     all     suits     brought    by     any    banking     association 

to  enjoin    established    in    the    district    for    which    the    court    is    held,    under 

Comptroller,    the  provisions  of  Title  "The  National  Bank,"  to  enjoin  the 

Comptroller   of    the    Currency,    or    any    receiver    acting    under    his 

direction,  as  provided  by  said  Title. 

General         181.     Sec.  4  of  the  act  of  July   12,    1882,  provides  that  the 

jurisdiction  of    jurisdiction  for  suits  hereafter  brought  by  or  against  any  association 

national-bank    established  under  any  law  providing  for  national  banking  associa- 

cases.    tions,    except    suits    between    them    and    the    United    States    or    its, 

officers  and  agents,  shall  be  the  same  as,  and  not  other  than,  the 

jurisdiction    for    suits    by    or    against    banks    not    organized    under 

any   law   of    the    United    States   which    do   or    might   do   banking 

business   where    such   national    banking   associations   may   be    doing 

business  when  such  suits  may  be  begun.     And  all  laws  and  parts 

of    laws    of    the    United   States   inconsistent   with    this    proviso   be, 

and  the  same  are  hereby,  repealed.     Sec.  4  of  the  act  of  March 


NATIONAL   BANK   ACT  187 


3,  1887,  provides  that  all  national  banking  associations  established 
under  the  laws  of  the  United  States  shall,  for  the  purpose  of  all 
actions  by  or  against  them,  real,  personal,  or  mixed,  and  all  suits 
in  equity,  be  deemed  citizens  of  the  States  in  which  they  are 
respectively  located;  and  in  such  cases  the  circuit  and  district 
courts  shall  not  have  jurisdiction  other  than  such  as  they  would  have 
in  cases  between  individual  citizens  of  the  same  State.  Hie 
provisions  of  this  section  shall  not  be  held  to  affect  the  jurisdiction 
of  the  courts  of  the  United  States  in  cases  commenced  by  the 
United  States  or  by  direction  of  any  officer  thereof,  of  cases  for 
winding  up  the  affairs  of  any  such  bank. 

182.  (Sec.  884.)    Every  certificate,  assignment,  and  conveyance  Sealed 
executed  by  the  Comptroller  of  the  Currency,  in  pursuance  of  law,  certificates  of 
and  sealed  with  his  seal  of  office,  shall  be  received  in  evidence  in  Comptroller  are 
all    places    and    courts;    and    all    copies    of    papers    in    his    office,  competent 
certified  by  him  and   authenticated  by  the  said  seal,   shall   in   all  evidence. 
cases  be   evidence   equally  with   the   originals.      An   impression   of 

such  seal  directly  on  the  paper  shall  be  as  valid  as  if  made  on 
wax  or  wafer. 

183.  (Sec.  885.)     Copies  of  the  organization  certificate  of  any   Certified  copy  of 
national  banking  association,   duly  certified  by   the  Comptroller  of   organization 

the   Currency    and    authenticated    by    his    seal    of    office,    shall    be   certificate  as 
evidence   in    all   courts   and   places   within   the   jurisdiction    of   the   evidence. 
United   States    of   the   existence   of   the    association   and   of   every 
matter  which  could  be  proved  by  the  production  of   the   original 
certificate. 

184.  (Sec.   380.)      All  suits  and  proceedings  arising  out  of   Suits  against 
the    provisions    of    law    governing    national    banking    associations.    United  States 

in  which  the  United  States  or  any  of  its  officers  or  agents  shall   officers  or  agents. 
be   parties,    shall    be    conducted    by    the    district    attorneys    of    the 
several  districts  under  the  direction  and  supervision  of  the  Solicitor 
of  the  Treasury. 

1 85.  Sec.  31  of  the  Act  of  May  2,  1 890,  provides  that  all  laws   Indian  Territory;. 
relating  to  national  banking  associations  shall  have  the  same  force 

and  effect  in  Indian  Territory  as  elsewhere  in  the  United  States. 


188 


N.    W.    HALSEY    &   CO. 


Provision  for 
organization. 


Organization 

certificate  of 

company. 

Title. 

Purposes. 

Period  of 
existence. 

Officers. 


Capital  stock. 


Chapter  Nine. 
TRUST  COMPANIES,  ETC.,  DISTRICT  OF  COLUMBIA. 

1 86.  The  act  of  October  1 ,  1 890,  sec.  1 ,  provides  that 
corporations  may  be  formed  within  the  District  of  Columbia 
for  the  purposes  hereinafter  mentioned  in  the  following  manner: 
Any  time  hereafter  any  number  of  natural  persons,  citizens  of 
the  United  States,  not  less  than  twenty-five,  may  associate  them- 
selves together  to  form  a  company  for  the  purpose  of  carrying 
on  in  the  District  of  Columbia  any  one  of  the  three  classes  of 
business  herein  specified,  to  wit: 

First.     A  safe  deposit,  trust,  loan,  and  mortgage  business. 

Second.     A  title  insurance,  loan,  and  mortgage  business. 

Third.  A  security,  guaranty,  indemnity,  loan,  and  mortgage 
business:  Provided,  That  the  capital  stock  of  any  of  said  companies 
shall  not  be  less  than  one  million  of  dollars:  Provided  further.  That 
any  of  said  companies  may  also  do  a  storage  business  when  their 
capital  stock  amounts  to  the  sum  of  not  less  than  one  million  two 
hundred  thousand  dollars. 

187.  (Sec.  2.)  That  such  persons  shall,  under  their  hands 
and  seals,  execute,  before  some  officer  in  said  District  competent 
to  take  the  acknowledgment  of  deeds,  an  organization  certificate, 
which  shall  specifically  state — 

First.     The  name  of  the  corporation. 

Second.     The  purposes  for  which  it  is  formed. 

Third.  The  term  for  which  it  is  to  exist,  which  shall  not  exceed 
the  term  of  fifty  years,  and  be  subject  to  alteration,  amendment,  or 
repeal  by  Congress  at  any  time. 

Fourth.  The  number  of  its  directors,  and  the  names  and  resi- 
dences of  the  officers  who  for  the  first  year  are  to  manage  the  affairs' 
of  the  company. 

Fifth.  The  amount  of  the  capital  stock  and  its  subdivision  into 
shares. 


NATIONAL    BANK   ACT 


189 


188.  (Sec.  3.)  That  this  certificate  shall  be  presented  to 
the  Commissioners  of  the  District,  who  shall  have  power  and 
discretion  to  grant  or  to  refuse  to  said  persons  a  charter  of  incorpora- 
tion upon  the  terms  set  forth  in  the  said  certificate  and  the  provisions 
of  this  act. 


Charter  obtained 
from  district 
commissioners. 


189.  (Sec.  4.)      That  previous  to  the  presentation  of  the  said    Notice  of 
certificate    to    the    said    Commissioners    notice    of    the    intention    to    intention  to  apply 
apply    for   such    charter   shall    be    inserted    in   two   newspapers   of    f°r  charter. 
general    circulation    printed    in    the    District    of   Columbia    at    least 

four  times  a  week  for  three  weeks,  setting  forth  briefly  the  name 
of  the  proposed  company,  its  character  and  object,  the  names 
of  the  proposed  corporators,  and  the  intention  to  make  application 
for  a  charter  on  a  specified  day,  and  the  proof  of  such  publica- 
tion shall  be  presented  with  said  certificate  when  presentation 
thereof  is  made  to  said  Commissioners. 

190.  (Sec.  5.)      That  if  the  charter  be  granted  as  aforesaid    Charter  filed 

it,  together  with  the  certificate  of  the  Commissioners  granting  n"'"  recorder  of 
the  same  indorsed  thereon,  shall  be  filed  for  record  in  the  office  deeds  for  the 
of  the  recorder  of  deeds  for  the  District  of  Columbia,  and  shall  district. 
be  recorded  by  him.  On  the  filing  of  the  said  certificate  with  the 
said  recorder  of  deeds  as  herein  provided,  approved  as  aforesaid 
by  the  said  Commissioners,  the  persons  named  therein  and  their 
successors  shall  thereupon  and  thereby  be  and  become  a  body 
corporate  and  politic,  and  as  such  shall  be  vested  with  all  the 
powers  and  charged  with  all  the  liabilities  conferred  upon  and 
imposed  by  this  act  upon  companies  organized  under  the  provisions 
hereof:  Provided,  however,  That  no  corporation  created  and 
organized  under  the  provisions  hereof,  or  availing  itself  of  the  pro- 
visions hereof  as  provided  in  section  eleven,  shall  be  authorized  to 
transact  the  business  of  a  trust  company,  or  any  business  of  a  fiduciary 
character,  until  it  shall  have  filed  with  the  Comptroller  of  the  Cur- 
rency a  copy  of  its  certificate  of  organization  and  character  and  shall 
have  obtained  from  him  and  filed  the  same  for  record  with  the  said 
recorder  of  deeds  a  certificate  that  the  capital  stock  of  said  company 
has  been  paid  in  and  the  deposit  of  securities  made  with  said  Comp- 
troller in  the  manner  and  to  the  extent  required  by  this  act. 


190 


N.    W.    HALSEY    &   CO. 


Trust  companies  191.  (Sec.  6.)  That  all  companies  organized  hereunder,  or 
under  which  shall  under  the  provisions  hereof  become  entitled  to  transact 
Comptrollers  the  business  of  a  trust  company,  shall  report  to  the  Comptroller  of 
supervision,  the  Currency  in  the  manner  prescribed  by  sections  fifty-two  hundred 
and  eleven,  fifty-two  hundred  and  twelve,  and  fifty-two  hundred 
and  thirteen,  Revised  Statutes  of  the  United  States,  in  the  case 
of  national  banks,  and  all  acts  amendatory  thereof  or  supplementary 
thereto,  and  with  similar  provisions  for  compensating  examiners, 
and  shall  be  subject  to  like  penalties  for  failure  to  do  so.  The 
Comptroller  shall  have  and  exercise  the  same  visitorial  powers 
over  the  affairs  of  the  said  corporation  as  is  conferred  upon  him 
by  section  fifty-two  hundred  and  forty  of  the  Revised  Statutes 
of  the  United  States  in  the  case  of  national  banks.  He  shall  also 
have  power,  when  in  his  opinion  it  is  necessary,  to  take  possession 
of  any  such  company  for  the  reasons  and  in  the  manner  and  to  the 
same  extent  as  are  provided  in  the  laws  of  the  United  States 
with  respect  to  national  banks. 

Poivers  of  these        192.      (Sec.  7.)      That  all  companies  organized  under  this  act 
companies,   are    hereby   declared   to   be    corporations   possessed   of   the   powers 
and  functions  of  corporations  generally,  and  shall  have  power — 


Contracts.        First.      To   make    contracts. 


Suits. 


Seal. 


Second.     To  sue  and  be  sued,   implead  and  be  impleaded,   in 
any  court  as  fully  as  natural  persons. 


Loans. 
Special  powers. 


Third, 
pleasure. 

Fourth. 


To  make  and  use  a  common  seal  and  alter  the  same  at 


To    loan    money. 


Fifth.  When  organized  under  subdivision  one  of  the  first  section 
of  this  act  to  accept  and  execute  trusts  of  any  and  every  description 
which  may  be  committed  or  transferred  to  them,  and  to  accept  the 
office  and  perform  the  duties  of  a  receiver,  assignee,  executor,  admin- 
istrator, guardian  of  the  estates  of  minors,  with  the  consent  of  the 
guardian  of  the  person  of  such  minor,  and  committee  of  the  estates  of 
lunatics  and  idiots  whenever  any  trusteeship  or  any  such  office  or 
appointment  is  committed  or  transferred  to  them,  with  their  consent,  by 
any  person,  body  politic  or  corporate,  or  by  any  court  in  the  District 


NATIONAL   BANK   ACT  191 

of  Columbia,  and  all  such  companies  organized  under  the  first  sub- 
division of  section  one  of  this  act  are  further  authorized  to  accept 
deposits  of  money  for  the  purposes  designated  herein  upon  such 
terms  as  may  be  agreed  upon  from  time  to  time  with  depositors, 
and  to  act  as  agent  for  the  purpose  of  issuing  or  countersigning 
the  bonds  or  obligations  of  any  corporation,  association,  munici- 
pality, or  State,  or  other  public  authority,  and  to  receive  and 
manage  any  sinking  fund  on  any  such  terms  as  may  be  agreed 
upon,  and  shall  have  power  to  issue  its  debenture  bonds  upon 
deeds  of  trust  or  mortgages  of  real  estate  to  a  sum  not  exceeding 
the  face  value  of  said  deeds  of  trust  or  mortgages,  and  which 
shall  not  exceed  fifty  per  centum  of  the  fair  cash  value  of  the 
real  estate  covered  by  said  deeds  or  mortgages,  to  be  ascertained 
by  the  Comptroller  of  the  Currency.  But  no  debenture  bonds 
shall  be  issued  until  the  securities  on  which  the  same  are  based 
have  been  placed  in  the  actual  possession  of  the  trustee  named 
in  the  debenture  bonds,  who  shall  hold  said  securities  until  all 
of  said  bonds  are  paid;  and  when  organized  under  the  second 
subdivision  of  the  first  section  of  this  act  said  company  is  authorized 
to  insure  titles  to  real  estate  and  to  transact  generally  the  business 
mentioned  in  said  subdivision;  and  when  organized  under  the 
third  subdivision  of  section  one  of  this  act  said  company  is  hereby 
authorized,  in  addition  to  the  loan  and  mortgage  business  therein 
mentioned,  to  secure,  guaranty,  and  insure  individuals,  bodies 
politic,  associations,  and  corporations  against  loss  by  or  through 
trustees,  agents,  servants,  or  employees,  and  to  guaranty  the  faithful 
performance  of  contracts  and  of  obligations  of  whatever  kind 
entered  into  by  or  on  the  part  of  any  person  or  persons,  association, 
corporation  or  corporations,  and  against  loss  of  every  kind; 
Provided,  That  any  corporation  formed  under  the  provisions  of 
this  act  when  acting  as  trustee  shall  be  liable  to  account  for 
the  amounts  actually  earned  by  the  moneys  held  by  it  in  trust 
in  addition  to  the  principal  so  held;  but  such  corporation  may  be 
allowed  a  reasonable  compensation  for  services  performed  in  the 
care  of  the  trust  estate. 

193.      (Sec.  8.)      That  in  all  cases  in  which  application  shall   Competent  to 
be  made  to  any   court  in   the   District  of   Columbia,   or   wherever   act  as  trustee,  etc. 


192 


N.    W.    HALSEY    &   CO. 


it  becomes  necessary  or  proper  for  said  court  to  appoint  a  trustee, 
receiver,  administrator,  guardian  of  the  estate  of  a  minor,  or  com- 
mittee of  the  estate  of  a  lunatic,  it  shall  and  may  be  lawful  for  said 
court  (but  without  prejudice  to  any  preference  in  the  order  of 
any  such  appointments  required  by  existing  law)  to  appoint  any 
such  company  organized  under  the  first  subdivision  of  section  one 
of  this  act,  with  its  assent,  such  trustee,  receiver,  administrator, 
committee,  or  guardian,  with  the  consent  of  the  guardian  of  the 
person  of  such  minor:  Provided,  however,  That  no  court  or  judge 
who  is  an  owner  of  or  in  any  manner  financially  interested  in 
the  stock  or  business  of  such  corporation  shall  commit  by  order 
or  decree  to  any  such  corporation  any  trust  or  fiduciary  duty. 

Qualifications  of  ]  94.  (Sec.  9.)  That  whenever  any  corporation  operating  under 
such  trustee,  etc.  this  act  shall  be  appointed  such  trustee,  executor,  administrator, 
receiver,  assignee,  guardian,  or  committee  as  aforesaid,  the  presi- 
dent, vice-president,  secretary,  or  treasurer  of  said  company  shall 
take  the  oath  of  affirmation  now  required  by  law  to  be  made  by 
any  trustee,  executor,  receiver,  assignee,  guardian,  or  committee. 


Security  for 
faithful 

performance 
of  trust. 


Privileges 

extended  to 

existing 

corporations. 


195.  (Sec.  10.)  That  when  any  court  shall  appoint  the 
said  company  a  trustee,  receiver,  administrator,  or  such  guardian, 
or  committee,  or  shall  order  the  deposit  of  money  or  other  valuables 
with  said  company,  or  where  any  individual  or  corporation  shall 
appoint  any  of  said  companies  a  trustee,  executor,  assignee,  or  such 
guardian,  the  capital  stock  of  said  company  subscribed  for  or  taken, 
and  all  property  owned  by  said  company,  together  with  the  liability 
of  the  stockholders  and  officers  as  herein  provided,  shall  be  taken 
and  considered  as  the  security  required  by  law  for  the  faithful 
performance  of  its  duties,  and  shall  be  absolutely  liable  in  case 
of  any  default  whatever. 

196.  (Sec.  1  I.)  That  any  safe  deposit  company,  trust  com- 
pany, surety  or  guaranty  company,  or  title-insurance  company 
now  incorporated  and  operating  under  the  laws  of  the  United 
States  or  of  the  District  of  Columbia,  or  any  of  the  States,  and 
now  doing  business  in  said  District,  may  avail  itself  of  the  provisions 
of  this  act  on  the  filing  in  the  office  of  the  recorder  of  deeds  of 
the  District  of  Columbia,  or  with  the  Comptroller  of  the  Currency, 


NATIONAL   BANK   ACT 193 

■^— »- *^ — — — ^ ^— »— — — ^— — ■— »»^ — ^ »^^ 

a  certificate  of  its  intention  to  do  so,  which  certificate  shall  specify 
which  one  of  the  three  classes  of  business  set  out  in  section  one 
it  will  carry  on,  and  shall  be  verified  by  the  oath  of  its  president 
to  the  effect  that  it  has  in  every  respect  complied  with  the  require- 
ments of  existing  law,  especially  with  the  provisions  of  this  act; 
that  its  capital  stock  is  paid  in  as  provided  in  section  twenty-one 
of  this  act  and  is  not  impaired,  and  thereafter  such  company  may 
exercise  all  powers  and  perform  all  duties  authorized  by  any 
one  of  the  subdivisions  of  section  one  of  this  act  in  addition  to  the 
powers  now  lawfully  exercised  by  such  company. 

197.  (Sec.  12.)      That  any  company  operating  under  this  act  Real  estate. 
may  lease,  purchase,  hold,  and  convey  real  estate,  not  exceeding  in 

value  five  hundred  thousand  dollars,  and  such  in  addition  as  it 
may  acquire  in  satisfaction  of  debts  due  the  corporation,  under 
sales,  decrees,  judgments,  and  mortgages.  But  no  such  association 
shall  hold  the  possession  of  any  real  estate  under  foreclosure  of  mort- 
gage, or  the  title  and  possession  of  any  real  estate  purchased  to 
secure  any  debts  due  to  it,  for  a  longer  period  than  five  years. 

198.  (Sec.  13.)     That  the  charters  for  incorporations  named  in  Period  of 
this  act  may   be  made  perpetual,   or  may  be   limited  in   time   by  corporations 
their  provisions,  subject  to  the  approval  of  Congress.  existence. 

199.  (Sec.  14.)     That  the  capital  stock  of  every  such  company  Provisions 
shall  be  at  least  one  million  dollars,  and  at  least  fifty  per  centum  relating  to 
thereof  must  have  been  paid  in,  in  cash  or  by  the  transfer  of  assets  capital  stoc^. 
as   hereinafter  provided   in   section   twenty-one   of   this   act,   before 

any  such  company  shall  be  entitled  to  transact  business  as  a 
corporation,  except  with  its  own  members,  and  before  any  company 
organized  hereunder  shall  be  entitled  to  transact  the  business  of 
a  trust  company,  or  to  become  and  act  as  an  administrator,  executor, 
guardian  of  the  estate  of  a  minor,  or  undertake  any  other  kindred 
fiduciary  duty,  it  shall  deposit,  either  in  money  or  in  bonds, 
mortgages,  deed  of  trust,  or  other  securities  equal  in  actual  value 
to  one-fourth  of  the  capital  stock  paid  in,  with  the  Comptroller 
of  the  Currency,  to  be  kept  by  him  upon  the  trust  and  for  the 
purposes  hereinafter  provided;  and  the  said  Comptroller  may 
from   time   to   time   require   an    additional   deposit    from    any   such 


194 N.    W.    HALSEY    &   CO. 

company,  to  be  held  upon  and  for  the  same  trust  and  purposes, 
not  exceeding,  however,  in  value  one-half  the  paid-in  capital  stock; 
and  the  said  Comptroller  shall  not  issue  to  any  corporation  the 
certificate  heretofore  provided  for  until  said  deposit  with  him  of 
securities  required  by  this  section.  Within  one  year  after  the 
organization  of  any  corporation  under  the  provisions  of  this  act, 
or  after  any  corporation  heretofore  existing  shall  have  availed 
itself  of  the  powers  and  rights  given  by  this  act  in  the  manner 
herein  provided  for,  its  entire  capital  stock  shall  have  been  paid  in. 

Enforcement  of  200.  (Sec.  15.)  That  the  capital  stock  of  every  such  com- 
subscriptions  pany.  sjiajj  ]^e  jjviJeJ  mto  shares  of  one  hundred  dollars  each. 
to  stock.  jt  sjiajj  ke  iawfui  for  sucft  company  to  call  for  and  demand  from 
the  stockholders,  respectively,  all  sums  of  money  by  them  sub- 
scribed, at  such  time  and  in  such  proportions  as  its  board  of 
directors  shall  deem  proper,  within  the  time  specified  in  section 
fourteen,  and  it  may  enforce  payment  by  all  remedies  provided 
by  law;  and  if  any  stockholder  shall  refuse  or  neglect  to  pay  any 
installment  as  required  by  a  resolution  of  the  board  of  directors, 
after  thirty  days'  notice  of  the  same,  the  said  board  of  directors 
may  sell  at  public  auction,  to  the  highest  bidder,  so  many  shares 
of  said  stock  as  shall  pay  said  installment,  under  such  general 
regulations  as  may  be  adopted  in  the  by-laws  of  said  company, 
and  the  highest  bidder  shall  be  taken  to  be  the  person  who  offers  to 
purchase  the  least  number  of  shares  for  the  assessment  due. 

Annual  report  of  201.  (Sec.  16.)  That  every  such  company  shall  annually, 
Lomptroller.  within  twenty  days  after  the  first  of  January  of  each  year,  make 
a  report  to  the  Comptroller  of  the  Currency,  which  shall  be 
published  in  a  newspaper  in  the  District,  which  shall  state  the 
amount  of  capital  and  of  the  proportion  actually  paid,  the  amount 
of  debts,  and  the  gross  earnings  for  the  year  ending  December 
thirty-first  then  next  previous,  together  with  their  expenses,  which 
report  shall  be  signed  by  the  president  and  a  majority  of  the 
directors  or  trustees,  and  shall  be  verified  by  the  oath  of  the 
president,  secretary,  and  at  least  three  of  the  directors  or  trustees. 

Tax  on  gross        202.      (Sec.  16.)      And  said  company  shall  pay  to  the  District 
earnings.    0f  Columbia,  in  lieu  of  personal  taxes  for  each  next  ensuing  year, 


NATIONAL   BANK   ACT 195 

one  and  a  half  per  centum  of  its  gross  earnings  for  the  preceding 
year,  shown  by  said  verified  statement,  which  amount  shall  be 
payable  to  the  collector  of  taxes  at  the  times  and  in  the  manner  that 
other  taxes  are  payable. 

203.  (Sec.   1  7.)      That  if  any  company  fails  to  comply  with     Liability  for 
the  provisions  of  the  preceding  section,  all  the  directors  or  trustees     failure  to  report. 
of  such  company  shall  be  jointly  and  severally  liable  for  the  debts 

of  the  company  then  existing,  and  for  all  that  shall  be  contracted 
before  such  report  shall  be  made:  Provided,  That  in  case  of 
failure  of  the  company  in  any  year  to  comply  with  the  provisions 
of  section  sixteen  of  this  act,  and  any  of  the  directors  shall,  on 
or  before  January  fifteenth  of  such  year,  file  his  written  request 
for  such  compliance  with  the  secretary  of  the  company,  the 
Comptroller  of  the  Currency,  and  the  recorder  of  deeds  of  the 
District  of  Columbia,  such  director  shall  be  exempt  from  the  liability 
prescribed  in  this  section. 

204.  (Sec.    18.)      That  any  willful  false  swearing  in  regard    Perjury  and 
to  any  certificate  or  report  or  public  notice  required  by   the  pro-     larceny. 
visions  of  this  act  shall  be  perjury,  and  shall  be  punished  as  such 

according  to  the  laws  of  the  District  of  Columbia.  And  any 
misappropriation  of  any  of  the  money  of  any  corporation  or  com- 
pany formed  under  this  act,  or  any  money,  funds,  or  property 
intrusted  to  it,  shall  be  held  to  be  larceny,  and  shall  be  punished 
as  such  under  the  laws  of  said  District. 

205.  (Sec.    19.)      That  the  stock  of  such  company  shall  be     Transfer  of  stock. 
deemed  personal  estate,  and  shall  be  transferable  only  on  the  books 

of  such  company  in  such  manner  as  shall  be  prescribed  by  the 
by-laws  of  the  company;  but  no  shares  shall  be  transferable  until 
all  previous  calls  thereon  shall  have  been  fully  paid,  and  the  said 
stock  shall  not  be  taxable,  in  the  hands  of  individual  owners, 
the  tax  on  the  capital  stock,  gross  earnings  of  the  company  herein- 
before provided  being  in  lieu  of  other  personal  tax.  All  certificates 
of  the  stock  of  any  company  organized  under  this  act  shall  show 
upon  their  face  the  par  value  of  each  share  and  the  amount  paid 
thereon. 


196 N.    W.    HALSEY    &   CO. 

Liability  of  206.  (Sec.  20.)  That  all  stockholders  of  every  company 
stockholders,  incorporated  under  this  act,  or  availing  itself  of  its  provisions  under 
section  eleven,  shall  be  severally  and  individually  liable  to  the 
creditors  of  such  company  to  an  amount  equal  to  and  in  addition 
to  the  amount  of  stock  held  by  them,  respectively,  for  all  debts  and 
contracts  made  by  such  company. 

Money       207.      (Sec.  21.)      That  nothing  but  money  shall  be  considered 

payment  of  as  payment  of  any  part  of  the  capital   stock,   except  that   in   the 

capital  stock  case  of  any  company  now  doing  business  in  the  District  of  Columbia 

required,  in   any   of   the  classes  herein  provided   for,   or   under   any   act   of 

Congress  or  by  virtue  of  the  laws  of  any  of  the  States,  and  which 

company  has  actually  received  full  payment  in  money  of  at  least 

fifty   per   centum   of    the    capital    stock   required   by   this    act    and 

which    company    desires    to    obtain    a    charter    under    this    act,    all 

the  assets  or  property  may  be  received  and  considered  as  money, 

at  a  value  to  be  appraised  and   fixed  by   the  Comptroller  of  the 

Currency:   Provided,   That  all   such   assets   and  property   are   also 

transferred  to  and  are  thereafter  owned  by  the  company  organized 

under  this  act. 

Number  and  208.  (Sec.  22.)  That  the  stock,  property,  and  concerns  of  such 
election  of  company  shall  be  managed  by  not  less  than  nine  nor  more  than 
directors,  thirty  directors  or  trustees,  who  shall,  respectively,  be  stockholders 
and  at  least  one-half  residents  and  citizens  of  the  District  of 
Columbia,  and  shall,  except  the  first  year,  be  annually  elected 
by  the  stockholders  at  such  time  and  place  and  after  such  published 
notice  as  shall  be  determined  by  the  by-laws  of  the  company, 
and  said  directors  or  trustees  shall  hold  until  their  successors  are 
elected  and  qualified. 

Appointment  of  209.  (Sec.  23.)  That  there  shall  be  a  president  of  the 
officers,  company,  who  shall  be  a  director,  also  a  secretary  and  a  treasurer, 
all  of  whom  shall  be  chosen  by  the  directors  or  trustees:  Provided, 
That  only  one  of  the  above-named  officers  shall  be  held  by  the 
same  person  at  the  same  time.  Subordinate  officers  may  be 
appointed  by  the  directors  or  trustees,  and  all  such  officers  may 
be  required  to  give  such  security  for  the  faithful  performance 
of  the  duties  of  their  office  as  the  directors  or  trustees  may  require. 


NATIONAL    BANK   ACT  197 

210.  (Sec.   24.)      That  the   directors  or   trustees   shall   have  B^-Laxvs. 
power  to  make  such  by-laws  as  they  deem  proper  for  the  manage- 
ment or  disposal  of  the  stock  and  business  affairs  of  such  company, 

not  inconsistent  with  the  provisions  of  this  act,  and  prescribing  the 
duties  of  officers  and  servants  that  may  be  employed,  for  the 
appointment  of  all  officers,  and  for  carrying  on  all  kinds  of 
business  within  the  objects  and  purposes  of  such  company. 

211.  (Sec.   25.)      That  if   the   directors   or   trustees  of   any  jylTecion*  l{aole 
company    shall    declare    or    pay    any    dividend,    the    payment    of  ,     t>avment  of 
which   would  render  it   insolvent,   or  which  would   create   a   debt  unearne(j 
against   such   company,   they   shall   be  jointly   and   severally   liable  j{vuenjs 

as  guarantors  for  all  of  the  debts  of  the  company  then  existing, 
and  for  all  that  shall  be  thereafter  contracted,  while  they  shall, 
respectively,  remain  in  office. 

212.  (Sec.  26.)      That  if  any  of  the  directors  or  trustees  shall  f)ireciors* 
object  to  declaring  of  such  dividend  or  the  payment  of  the  same,  [{^{{fa  ma]J  fce 
and  shall  at  any  time  before  the  time  fixed  for  the  payment  thereof  aV0:jeJ 

file  a  certificate  of  their  objection  in  writing  with  the  secretary 
of  the  company  and  with  the  recorder  of  deeds  of  the  District 
they  shall  be  exempt  from  liability  prescribed  in  the  preceding  section. 

213.  (Sec.  27.)      That  if  the  liabilities  of  any  company  shall  Responsil)ility)  0f 
at  any  time  exceed  the  amount  of  the  fair  cash  value  of  the  assets,  J/recfors  for 

the   directors   or   trustees   of   such   company   assenting    thereto   shall  excess  liabilities 
be  personally  and  individually  liable  for  such  excess  to  the  creditors 
of   the   company   after  the  additional   liability  of  the   stockholders 
has  been  enforced. 

2 1 4.  (Sec.  28.)     That  no  person  holding  stock  in  such  company 

,    .  .  ,.  i    u  i  ii     i  rustee,  etc., 

as  executor,  administrator,   guardian,  or  trustee  shall   be  personally  . 

i  •  •«  i*  1 1    1 1        t        i  l       ti     n°t  liable  on 

subject  to   any   liability  as   stockholder   of  such  company,    but   the         , 

estate    and    funds    in    the    hands    of    such    executor,    administrator, 

guardian,    or    trustee   shall    be    liable    in   like   manner    and   to    the 

same  extent  as  the  testator  or  intestate  or  the  ward  or  the  person 

interested   in   such   trust    fund   would   have   been   if   he    had    been 

living  and  competent  to  act  and  hold  the  stock  in  his  own  name. 


198 


N.    W.    HALSEY    &   CO. 


Increase  of         215.      (Sec.  29.)      That  any  corporation  which  may  be  formed 
capital,     under    this    chapter    may    increase    its    capital    stock   by    complying 
with  the  provisions  of  this  chapter  to  any  amount  which  may  be 
deemed  sufficient  and  proper  for  the  purposes  of  the  corporation. 

Certified  copy         216.      (Sec.  30.)      That  a  copy  of  any  certificate  of  incorpora- 

of  incorporation  tion   filed  in  pursuance   of   this   chapter,   certified   by   the   recorder 

certificate  of   deeds   to  be   a   true   copy    and   the  whole   of   such   certificate, 

competent  shall   be    received    in    all    courts    and   places    as   presumptive    legal 

evidence,  evidence  of  the  facts  therein  stated. 


No  bond  or 

other  security 

required  of 

trust  companies. 


District  supreme 

court  has 

jurisdiction  of 

trust  companies. 


217.  (Sec.  31.)  That  no  bond  or  other  collateral  security, 
except  as  hereinafter  stated,  shall  be  required  from  any  trust 
company  incorporated  under  this  act  for  or  in  respect  to  any 
trust,  nor  when  appointed  trustee,  guardian,  receiver,  executor, 
or  administrator,  with  or  without  the  will  annexed,  committee  of  the 
estate  of  a  lunatic  or  idiot,  or  other  fiduciary  appointment;  but 
the  capital  stock  subscribed  for  or  taken,  and  all  property  owned 
by  said  company  and  the  amount  for  which  said  stockholders  shall 
be  liable  in  excess  of  their  stock,  shall  be  taken  and  considered 
as  the  security  required  by  law  for  the  faithful  performance  of 
its  duties  and  shall  be  absolutely  liable  in  case  of  any  default 
whatever;  and  in  case  of  the  insolvency  or  dissolution  of  said 
company  the  debts  due  from  the  said  company  as  trustee,  guardian, 
receiver,  executor,  or  administrator,  committee  of  the  estate  of 
lunatics,  idiots,  or  any  other  fiduciary  appointment,  shall  have  a 
preference. 

218.  (Sec.  32.)  That  the  supreme  court  of  the  District  of 
Columbia,  or  any  justice  thereof,  shall  have  power  to  make  orders 
respecting  such  company  whenever  it  shall  have  been  appointed 
trustee,  guardian,  receiver,  executor,  or  administrator,  with  or  with- 
out the  will  annexed,  committee  of  the  estate  of  a  lunatic,  idiot, 
or  any  other  fiduciary,  and  require  the  said  company  to  render  all 
accounts  which  might  lawfully  be  made  or  required  by  any  court 
or  any  justice  thereof  if  such  trustee,  guardian,  receiver,  executor, 
administrator,  with  or  without  the  will  annexed,  committee  of  the 
estate  of  a  lunatic  or  idiot,  or  fiduciary  were  a  natural  person. 
And  said  court,  or  any  justice  thereof,  at  any  time,  on  application 


NATIONAL    BANK   ACT 199 

of  any  person  interested,  may  appoint  some  suitable  person  to 
examine  into  the  affairs  and  standing  of  such  companies,  who 
shall  make  a  full  report  thereof  to  the  court,  and  said  court,  or 
any  justice  thereof,  may  at  any  time,  in  its  discretion,  require  of 
said  company  a  bond  with  sureties  or  other  securities  for  the  faithful 
performance  of  its  obligations,  and  such  sureties  or  other  security 
shall  be  liable  to  the  same  extent  and  in  the  same  manner  as  if 
given  or  pledged  by  a  natural  person. 

219.  (Sec.  33.)      That  no  corporation  or  company  organized  All  similar 
by  virtue  of  the  laws  of  any  of  the  States  of  this  Union  and  having  district 

its   principal    place    of   business    within    the    District   of    Columbia,  corporations 
shall  carry  on,   in  the  District  of  Columbia,   any  of  the   kinds  of  subject  to  this 
business  named  in  this  act  without  strict  compliance  in  all  particulars  act. 
with  the  provisions  of  this  act  for  the  government  of  such  corpora- 
tions formed  under  it,  and  each  one  of  the  officers  of  the  corpora- 
tion or  company  so  offending  shall  be  punished  by  fine  not  exceeding 
one   thousand   dollars,   or  imprisonment  in  some   State's   prison   not 
exceeding    one    year,    or   by    both    fine    and    imprisonment,    in    the 
discretion   of    the    court.      This    section    shall    not    take    effect    till 
six  months  after  the  approval  of  this  act. 

220.  (Sec.  34.)     That  Congress  may  at  any  time  alter,  amend,  Provisions  for 
or  repeal  this  act,  but  any  such  amendment  or  repeal  shall  not,  nor  amendment. 
shall  the  dissolution  of  any  company   formed  under  this  act,  take 

away  or  impair  any  remedy  given  against  such  corporation,  its 
stockholders  or  officers,  for  any  liability  or  penalty  which  shall 
have  been  previously  incurred:  Provided,  That  the  courts  of  the 
District  of  Columbia  shall  not  have  power  to  appoint  any  trustee, 
trustees,  guardians,  receivers,  or  other  trustee  of  a  fund  or  property 
located  outside  of  the  District  of  Columbia,  or  belonging  to  a 
corporation  or  person  having  a  legal  residence  or  location  outside 
of  said  District. 


200  N.    W.    HALSEY   &   CO. 

Chapter  Ten. 
SAVINGS  BANKS,   ETC.,   DISTRICT  OF  COLUMBIA. 


INCORPORATION   OF  SAVINGS   BANKS   IN   THE 
DISTRICT  OF  COLUMBIA. 

'An  Act  to  Establish  a  Code  of  Law  for  the  District  of 
Columbia,"  Approved  March  Third,  Nineteen  Hun- 
dred and  One,  as  Amended  by  the  Acts  Approved 
January  Thirty-first  and  June  Thirtieth,  Nineteen 
Hundred  and  Two. 

Chapters  XVIII.      Subchapter  IV.      Sec.  605. 


Provision  for  22 1 .  "Any  three  or  more  persons  who  desire  to  form  a  company 
organization,  for  the  purpose  of  carrying  on  any  enterprise  or  business  which 
may  be  lawfully  conducted  by  an  individual,  excepting  banks  of 
circulation  or  discount  (corporations  to  buy,  sell,  or  deal  with  real 
property),  railroads,  and  such  other  enterprise  or  business  as  may 
be  otherwise  specially  provided  for  in  this  code,  may  make,  sign, 
and  acknowledge,  before  some  officer  competent  to  take  the 
acknowledgment  of  deeds,  and  file  in  the  office  of  the  recorder 
of  deeds  a  certificate  in  writing:  Provided,  That  nothing  herein 
contained  shall  be  held  to  authorize  the  organization  of  corpora- 
tions to  buy,  sell,  or  deal  in  real  estate,  except  corporations  to 
transact  the  business  ordinarily  carried  on  by  real-estate  agents  or 
brokers." 

Rettort  to  be  222.  (Sec.  713.)  All  savings  banks  or  savings  companies  or 
i    .     institutions   organized   under   authority   of   any   act  of   Congress   to 

Comptroller  ^°  business  *n  tne  District  of  Columbia  shall  be,  and  are  hereby, 
required  to  make  to  the  Comptroller  of  the  Currency,  and  publish, 
all  the  reports  which  national  banking  associations  are  required  to 
make  and  publish  under  the  provisions  of  sections  fifty-two  hundred 
and  eleven,  fifty-two  hundred  and  twelve,  and  fifty-two  hundred 
and  thirteen  of  the  Revised  Statutes,  and  shall  be  subject  to  the 
same  penalties  for  failure  to  make  or  publish  such  reports  as  are 
therein  provided,  which  penalties  may  be  collected  by  suit  before 


NATIONAL   BANK   ACT  201 

the  supreme  court  of  the  District  of  Columbia. — Act  of  June 
30,    1902. 

223.  (SEC.  714.)    The  Comptroller  of  the  Currency,  in  addition  Compkoller 
to  the  powers  now  conferred  upon  him  by  law  for  the  examination  authorized  to 
of  nationl   banks,   is   hereby   further   authorized,   whenever   he   may  examine. 
deem  it  useful,  to  cause  examination  to  be  made  into  the  condition 

of  any  bank  in  the  District  of  Columbia  organized  under  act  of 
Congress.  The  Comptroller,  at  his  discretion,  may  report  to 
Congress  the  results  of  such  examination.  The  expenses  necessarily 
incurred  in  the  execution  of  this  section  shall  be  paid  out  of  any 
appropriation  made  by  Congress  for  special  bank  examinations. 

An  Act  to  amend  sections  seven  hundred  and  thirteen  and  seven  hundred 
and  fourteen  of  "An  Act  to  establish  a  code  of  law  for  the  District 
of  Columbia,"  approved  March  third,  nineteen  hundred  and  one,  as 
amended  by  the  Acts  approved  January  thirty-first  and  June  thirtieth, 
nineteen  hundred  and  two,  and  for  other  purposes. 

224.  Be  it  enacted  hy  the  Senate  and  House  of  Representatives   Amendments 
of   the    United   States   of   America    in   Congress   assembled,    That   to  law. 
sections    seven    hundred     and    thirteen     and    seven    hundred    and 

fourteen  of  an  Act  entitled  "An  Act  to  establish  a  code  of  law 
for  the  District  of  Columbia,"  approved  March  third,  nineteen 
hundred  and  one,  as  amended,  by  the  Acts  approved  January 
thirty-first  and  June  thirtieth,  nineteen  hundred  and  two,  are 
hereby  amended  so  as,  respectively,  to  read  as  follows: 

"Sec.  713.  All  savings  banks,  or  savings  companies,  or  trust 
companies,  or  other  banking  institutions,  organized  under  authority 
of  any  Act  of  Congress  to  do  business  in  the  District  of  Columbia, 
or  organized  by  virtue  of  the  laws  of  any  of  the  States  of  this 
Union,  and  having  an  office  or  banking  house  located  within  the 
District  of  Columbia  where  deposits  or  savings  are  received,  shall 
be,  and  are  hereby,  required  to  make  to  the  Comptroller  of  the 
Currency  and  to  publish  all  the  reports  which  national  banking 
associations  are  required  to  make  and  publish  under  the  provisions 
of  sections  fifty-two  hundred  and  eleven,  fifty-two  hundred  and 
twelve,  and  fifty-two  hundred  and  thirteen  of  the  Revised  Statutes 
of  the  United  States,   and  shall  be  subject  to  the   same  penalties 


202  N.    W.    HALSEY    6-   CO. 


for  failure  to  make  such  reports  as  are  therein  provided,  which 
penalties  may  be  collected  by  suit  before  the  supreme  court  of 
the  District  of  Columbia.  And  the  Comptroller  shall  have  power, 
when  in  his  opinion  it  is  necessary,  to  take  possession  of  any  such 
bank  or  company,  for  the  reasons  and  in  the  manner  and  to  the 
same  extent  as  are  provided  in  the  laws  of  the  United  States  with 
respect  to  national  banks:  Provided,  however.  That  banking 
institutions  having  offices  or  banking  houses  in  foreign  countries 
as  well  as  in  the  District  of  Columbia  shall  only  be  required  to  make 
and  publish  the  reports  provided  for  in  this  section  semi-annually: 
And  provided  further,  That  all  publications  authorized  or  required 
by  said  section  fifty-two  hundred  and  eleven  of  the  Revised 
Statutes,  and  all  other  publications  authorized  or  required  by  existing 
law  to  be  made  in  the  District  of  Columbia,  shall  be  printed  in 
two  or  more  daily  newspapers  of  general  circulation,  published  in 
the  City  of  Washington,  one  of  which  shall  be  a  morning  newspaper. 

"Sec.  714.  The  Comptroller  of  the  Currency,  in  addition 
to  the  powers  now  conferred  upon  him  by  law  for  the  examination 
of  national  banks,  is  hereby  further  authorized,  whenever  he  may 
deem  it  useful,  to  cause  examination  to  be  made  into  the  condition 
of  any  bank  mentioned  in  the  preceding  section.  The  expense  of 
such  examination  shall  be  paid  in  the  manner  provided  by  section 
fifty-two  hundred  and  forty  of  the  Revised  Statutes  of  the  United 
States  relating  to  the  examination  of  national  banks." 

Approved,  June  25,  1906. 

Chapter  Eleven. 

GOVERNMENT  DEPOSITARIES. 

Designation  and  225.  (Sec.  5153,  as  amended  by  the  act  of  March  4,  1907.) 
duties  of  public  All  national  banking  associations,  designated  for  that  purpose  by 
depositaries,  the  Secretary  of  the  Treasury,  shall  be  depositaries  of  public  money, 
under  such  regulations  as  may  be  prescribed  by  the  Secretary; 
and  they  may  also  be  employed  as  financial  agents  of  the  Govern- 
ment; and  they  shall  perform  all  such  reasonable  duties,  as 
depositaries  of  public  money  and  financial  agents  of  the  Government, 


NATIONAL   BANK   ACT  203 

as  may  be  required  of  them.  The  Secretary  of  the  Treasury 
shall  require  the  associations  thus  designated  to  give  satisfactory 
security,  by  the  deposit  of  United  States  bonds  and  otherwise,  for 
the  safe-keeping  and  prompt  payment  of  the  public  money  deposited 
with  them,  and  for  the  faithful  performance  of  their  duties  as 
financial  agents  of  the  Government:  Provided,  That  the  Secretary 
shall,  on  or  before  the  first  of  January  of  each  year,  make  a 
public  statement  of  the  securities  required  during  that  year  for  such 
deposits.  And  every  association  so  designated  as  receiver  or 
depositary  of  the  public  money  shall  take  and  receive  at  par  all 
of  the  national  currency  bills,  by  whatever  association  issued, 
which  have  been  paid  into  the  Government  for  internal  revenue, 
or  for  loans  or  stocks.  Provided,  That  the  Secretary  of  the  Treasury 
shall  distribute  the  deposits  herein  provided  for,  as  far  as  practicable; 
equitably  between  the  different  States  and  sections. 

226.  (Sec.   3620.)      It  shall  be  the  duty  of  every  disbursing  Deposit  and 
officer  having  any  public  money  intrusted  to  him  for  disbursement  withdrawal  of 
to  deposit  the  same  with  the  Treasurer  or  some  one  of  the  assistant  public  moneys. 
treasurers  of  the  United  States,  and  to  draw  from  the  same  only  as 

it  may  be  required  for  payments  to  be  made  by  him  in  pursuance 
of  law;  and  draw  from  the  same  only  in  favor  of  the  persons  to 
whom  payment  is  made,  and  all  transfers  from  the  Treasurer  of 
the  United  States  to  a  disbursing  officer  shall  be  by  draft  or  warrant 
on  the  Treasurer  or  assistant  treasurer  of  the  United  States.  In 
places,  however,  where  there  is  no  Treasurer  or  assistant  treasurer, 
the  Secretary  of  the  Treasury  may,  when  he  deems  it  essential  to 
the  public  interest,  specially  authorize  in  writing  the  deposit  of 
such  public  money  in  any  other  public  depositary,  or,  in  writing, 
authorize  the  same  to  be  kept  in  any  other  manner  and  under  such 
rules  and  regulations  as  he  may  deem  most  safe  and  effectual  to 
facilitate  the  payments  to  public  creditors. 

227.  (Sec.    3847.)      Any  postmaster,   having   public   money  Provisions  for 
belonging  to  the  Government,   at  an  office  within  a  county  where  deposits  by 
there  are  no  designated  depositaries,  treasurers  of  mints,  or  Treasurer  certain 

or  assistant  treasurers  of  the  United  States  may  deposit  the  same,  at  postmasters. 
his  own  risk  and  in  his  official  capacity,  in  any  national  bank  in  the 


204  N.    W.    HALSEY    &   CO. 


town,  city,  or  county  where  the  said  postmaster  resides;  but  no 
authority  or  permission  is  or  shall  be  given  for  the  demand  or 
receipt  by  the  postmaster,  or  any  other  person,  of  interest,  directly 
or  indirectly,  on  any  deposit  made  as  herein  described;  and  every 
postmaster  who  makes  any  such  deposit  shall  report  quarterly  to 
the  Postmaster-General  the  name  of  the  bank  where  such  deposits 
have  been  made,  and  also  state  the  amount  which  may  stand 
at  the  time  to  his  credit. 

Penalty  for  228.  (Sec.  4046.)  Every  postmaster,  assistant,  clerk,  or  other 
misapplication  of  person  employed  in  or  connected  with  the  business  or  operations  of 
money-order  any  money-order  office  who  converts  to  his  own  use,  in  any  way 
funds,  whatever,  or  loans,  or  deposits  in  any  bank,  except  as  authorized 
by  this  Title,  or  exchanges  for  other  funds,  any  portion  of  the 
money-order  funds,  shall  be  deemed  guilty  of  embezzlement,  and 
any  such  person,  as  well  as  every  other  person  advising  or  partici- 
pating therein,  shall,  for  every  such  offense,  be  imprisoned  for  not 
less  than  six  months  nor  more  than  ten  years,  and  be  fined  in  a  sum 
equal  to  the  amount  embezzled;  and  any  failure  to  pay  over  or 
produce  any  money-order  funds  intrusted  to  such  person  shall  be 
taken  to  be  prima  facie  evidence  of  embezzlement;  and  upon  the 
trial  of  any  indictment  against  any  person  for  such  embezzlement 
it  shall  be  prima  facie  evidence  of  a  balance  against  him  to  produce 
a  transcript  from  the  money-order  account  books  of  the  Sixth 
Auditor.  But  nothing  herein  contained  shall  be  construed  to 
prohibit  any  postmaster  depositing,  under  the  direction  of  the  Post- 
master-General, in  a  national  bank  designated  by  the  Secretary  of 
the  Treasury  for  that  purpose,  to  his  own  credit  as  postmaster, 
any  money-order  or  other  funds  in  his  charge,  nor  prevent  his 
negotiating  drafts  or  other  evidences  of  debt  through  such  bank, 
or  through  United  States  disbursing  officer,  or  otherwise,  when 
instructed  or  required  to  do  so  by  the  Postmaster-General  for  the 
purpose  of  remitting  surplus  money-order  funds  from  one  post- 
office  to  another,  to  be  used  in  payment  of  money-orders.  Dis- 
bursing officers  of  the  United  States  shall  issue,  under  regulations 
to  be  prescribed  by  the  Secretary  of  the  Treasury,  duplicates  of 
lost  checks  drawn  by  them  in  favor  of  any  postmaster  on  account 


NATIONAL    BANK   ACT 205 

of  money  order  or  other  public  funds  received  by  them  from 
some    other    postmaster. 

229.  (Sec.   5488.)     Every   disbursing  officer   of   the   United  Penalty  for 
States    who    deposits    any   public   money   intrusted   to   him   in   any  unauthorized 
place  or  in  any  manner,  except  as  authorized  by  law,  or  converts  deposit  of  public 
to  his  own   use   in  any  way   whatever,   or  loans  with   or  without  money. 
interest,  or  for  any  purpose  not  prescribed  by  law  withdraws  from 

the  Treasurer  or  any  assistant  treasurer,  or  any  authorized  deposi- 
tary, or  for  any  purpose  not  prescribed  by  law  transfers  or  applies 
any  potion  of  the  public  money  intrusted  to  him,  is,  in  every  such 
act,  deemed  guilty  of  an  embezzlement  of  the  money  so  deposited, 
converted,  loaned,  withdrawn,  transferred,  or  applied;  and  shall 
be  punished  by  imprisonment  with  hard  labor  for  a  term  not  less 
than  one  year  nor  more  than  ten  years,  or  by  a  fine  of  not  more 
than  the  amount  embezzled  or  less  than  one  thousand  dollars,  or 
by  both  such  fine  and  imprisonment. 

230.  (SEC.  5497.)   Every  banker,  broker,  or  other  person  not  Penalty  for 
an  authorized  depositary  of  public  moneys,  who  knowingly  receives  unauthorized 
from  any  disbursing  officer,  or  collector  of  internal  revenue,  or  other  Teceipt  or  use  of 
agent  of  the  United  States,   any  public  money  on  deposit,  or  by  public  money. 
way  of  loan  or  accommodation,  with  or  without  interest,  or  other- 
wise than  in  payment  of  a  debt  against  the  United  States,  or  who 

uses,  transfers,  converts,  appropriates,  or  applies  any  portion  of  the 
public  money  for  any  purpose  not  prescribed  by  law,  and  every 
president,  cashier,  teller,  director,  or  other  officer  of  any  bank  or 
banking  association,  who  violates  any  of  the  provisions  of  this 
section,  is  guilty  of  an  act  of  embezzlement  of  the  public  money 
so  deposited,  loaned,  transferred,  used,  converted,  appropriated,  or 
applied,  and  shall  be  punished  as  prescribed  in  section  fifty-four 
hundred  and  eighty-eight. 


206  N.    W.    HALSEY    &   CO. 


Chapter  Twelve. 

MISCELLANEOUS. 

Legal  tender       231.      The  following  statement  concerning  the  legal-tender  prop- 
ane/ lawful  erties  of  money  of  the  United  States  is  based  upon  United  States 
money.  Revised  Statutes,  sections  3585,  3586,   3587,   3588,   3589,   and 
3590,   and  the  acts  amendatory  thereof  and  additional  thereto: 

Gold  coin,  standard  silver  dollars,  subsidiary  silver,  minor  coins, 
United  States  notes,  and  Treasury  notes  of  1890  have  the  legal- 
tender  quality  as  follows:  Gold  coin  is  legal  tender  for  its  nominal 
value  when  not  below  the  limit  of  tolerance  in  weight;  when  below 
that  limit  it  is  legal  tender  in  proportion  to  its  weight;  standard 
silver  dollars  and  Treasury  notes  of  1890  are  legal  tender  for  all 
debts,  public  and  private,  except  where  otherwise  expressly  stipu- 
lated in  the  contract;  subsidiary  silver  is  legal  tender  to  the  extent 
of  $10,  minor  coins  to  the  extent  of  25  cents,  and  United  States 
notes  for  all  debts,  public  and  private,  except  duties  on  imports 
and  interest  on  the  public  debt.  Gold  certificates,  silver  certificates, 
and  national-bank  notes  are  nonlegal-tender  money.  Both  kinds 
of  certificates,  however,  are  receivable  for  all  public  dues,  and 
national-bank  notes  are  receivable  for  all  public  dues  except  duties 
on  imports,  and  may  be  paid  out  for  all  public  dues,  except" 
interest  on  the  public  debt. 

The  term  "lawful  money"  is  understood  to  apply  to  every  form 
of  money  which  is  endowed  by  law  with  the  legal-tender  quality. 
(See  Opinions  of  Attorneys-General,  vol.   17,  p.   123.) 


Currency  Act 

of  March  14,  1900 


An  Act  to  Define  and  Fix  the  Standard  of  Value,  to 
Maintain  the  Parity  of  All  Forms  of  Money  Issued 
or  Coined  by  the  United  States,  to  Refund  the 
Public  Debt,  and  for  Other  Purposes. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the  Dollar  standard 
United  States  of  America  in  Congress  assembled,  That  the  dollar    unit 
consisting  of  twenty-five  and  eight-tenths  grains  of  gold  nine-tenths    of  value. 
fine,  as  established  by  section  thirty-five  hundred  and  eleven  of  the 
Revised  Statutes  of  the  United  States,   shall  be  the  standard  unit 
of  value,  and  all  forms  of  money  issued  or  coined  by  the  United 
States  shall  be  maintained  at  a  parity  of  value  with  this  standard, 
and  it  shall  be  the  duty  of  the  secretary  of  the  Treasury  to  maintain 
such  parity. 

Sec.  2.      That  United  States  notes,  and  Treasury  notes  issued   Redemption  of 
under   the   Act   of   July   fourteenth,   eighteen   hundred    and   ninety,    {J,  S.  notes  and 
when  presented  to  the  Treasury  for  redemption,  shall  be  redeemed    treasury  notes. 
in  gold  coin  of  the  standard  fixed  in  the  first  section  of  this  Act, 
and  in  order  to  secure  the  prompt  and  certain  redemption  of  such 
notes  as  herein  provided  it  shall  be  the  duty  of  the  Secretary  of 
the  Treasury  to  set  apart  in  the  Treasury  a  reserve   fund   of  one 
hundred  and  fifty  million  dollars  in  gold  coin  and  bullion,  which 
fund  shall  be  used  for  such  redemption  purposes  only,  and  when- 
ever and   as  often   as   any  of   said  notes   shall  be   redeemed   from 
said   fund  it  shall  be  the  duty  of  the  Secretary   of   the   Treasury 
to  use  said  notes  so  redeemed  to  restore  and  maintain  such  reserve    Maintenance  of 
fund   in   the  manner   following,    to   wit:    First,   by   exchanging   the    reserve. 
notes  so   redeemed  for  any  gold  coin  in   the   general   fund   of  the 
Treasury;    second,    by    accepting    deposits    of    gold    coin    at    the 
Treasury  or  at  any  subtreasury  in  exchange  for  the  United  States 
notes  so  redeemed;  third,  by  procuring  gold  coin  by  the  use  of  said 


208 


N.    W.    HALSEY    &   CO. 


notes,  in  accordance  with  the  provisions  of  section  thirty-seven 
hundred  of  the  Revised  Statutes  of  the  United  States.  If  the 
Secretary  of  the  Treasury  is  unable  to  restore  and  maintain  the 
gold  coin  in  the  reserve  fund  by  the  foregoing  methods,  and  the 
amount  of  such  gold  coin  and  bullion  in  said  fund  shall  at  any 
time  fall  below  one  hundred  million  dollars,  then  it  shall  be  his 
duty  to  restore  the  same  to  the  maximum  sum  of  one  hundred  and 
fifty  million  dollars  by  borrowing  money  on  the  credit  of  the  United 
States,  and  for  the  debt  thus  incurred  to  issue  and  sell 
Issuing  of  bonds  coupon  or  registered  bonds  of  the  United  States,  in  such 
to  maintain  form  as  he  may  prescribe,  in  denominations  of  fifty  dollars 
reserve,  or  any  multiple  thereof,  bearing  interest  at  the  rate  of  not 
exceeding  three  per  centum  per  annum,  payable  quarterly, 
such  bonds  to  be  payable  at  the  pleasure  of  the  United 
States  after  one  year  from  the  date  of  their  issue,  and  to  be 
payable,  principal  and  interest,  in  gold  coin  of  the  present 
standard  value,  and  to  be  exempt  from  the  payment  of  all 
taxes  or  duties  of  the  United  States,  as  well  as  from  taxa- 
tion in  any  form  by  or  under  State,  municipal,  or  local 
authority;  and  the  gold  coin  received  from  the  sale  of  said  bonds 
shall  first  be  covered  into  the  general  fund  of  the  Treasury  and  then 
exchanged,  in  the  manner  hereinbefore  provided,  for  an  equal  amount 
of  the  notes  redeemed  and  held  for  exchange,  and  the  Secretary  of  the 
Treasury  may,  in  his  discretion,  use  said  notes  in  exchange  for  gold, 
or  to  purchase  or  redeem  any  bonds  of  the  United  States,  or 
for  any  other  lawful  purpose  the  public  interests  may  require,  except 
that  they  shall  not  be  used  to  meet  deficiencies  in  the  current 
revenues.  That  United  States  notes  when  redeemed  in  accordance 
with  the  provisions  of  this  section  shall  be  reissued,  but  shall  be 
held  in  the  reserve  fund  until  exchanged  for  gold,  as  herein  pro- 
vided; and  the  gold  coin  and  bullion  in  the  reserve  fund,  together 
with  the  redeemed  notes  held  for  use  as  provided  in  this  section, 
shall  at  no  time  exceed  the  maximum  sum  of  one  hundred  and 
fifty  million  dollars. 

Sec.  3.  That  nothing  contained  in  this  Act  shall  be  construed 
to  affect  the  legal-tender  quality  as  now  provided  by  law  of  the 
silver  dollar,  or  of  any  other  money  coined  or  issued  by  the 
United  States. 


Notes  re-issued. 


Legal  tender. 


CURRENCY   ACT   OF    MARCH    14,    1900 


209 


Sec.  4.      That  there  be  established  in  the  Treasury  Department,    Divisions  of 
as   a   part   of   the   office   of   the   Treasurer   of   the   United    States,     issue  and 
divisions  to  be  designated  and  known  as  the  division  of  issue  and    redemption. 
the  division  of  redemption,  to  which  shall  be  assigned,  respectively, 
under    such    regulations    as    the    Secretary    of    the    Treasury    may 
approve,  all  records  and  accounts  relating  to  the  issue  and  redemp- 
tion of  United  States  notes,  gold  certificates,  silver  certificates,  and 
currency  certificates.     There  shall  be  transferred  from  the  accounts 
of   the   general   fund  of   the  Treasury   of   the   United   States,    and 
taken    up    on    the    books   of    said    divisions,    respectively,    accounts 
relating  to  the  reserve   fund   for  the  redemption   of  United  States    Reserves  are 
notes  and  Treasury  notes,   the  gold  coin  held   against  outstanding    trust  funds. 
gold  certificates,   the  United  States   notes  held   against  outstandnig 
currency  certificates,  and  the  silver  dollars  held  against  outstanding 
silver    certificates,    and    each    of    the    funds    represented    by    these 
accounts  shall  be  used  for  the  redemption  of  the  notes  and  certifi- 
cates for  which  they  are  respectively  pledged,   and  shall  be  used 
for  no  other  purpose,  the  same  being  held  as  trust  funds. 

Sec.    5.      That   it   shall   be   the   duty   of   the  Secretary   of   the    Coinage  of 
Treasury,   as   fast   as  standard  silver  dollars  are  coined  under  the    silver  dollars. 
provisions   of   the   Acts   of   July   fourteenth,    eighteen   hundred    and 
ninety,  and  June  thirteenth,  eighteen  hundred  and  ninety-eight,  from 
bullion    purchased    under    the    Act    of    July    fourteenth,    eighteen 
hundred    and    ninety,    to    retire    and    cancel    an    equal    amount    of    Retirement  of 
Treasury    notes    whenever    received    into    the    Treasury,    either    by    treasury  notes. 
exchange  in   accordance  with  the  provisions  of  this  Act  or  in  the 
ordinary  course  of  business,  and  upon  the  cancellation  of  Treasury 
notes  silver  certificates  shall  be  issued  against  the  silver  dollars  so 
coined. 

Sec.  6.  (As  amended  by  act  of  March  4,  1907.)  That  the  Gold  certificates. 
Secretary  of  the  Treasury  is  hereby  authorized  and  directed  to 
receive  deposits  of  gold  coin  with  the  Treasurer  or  any  assistant 
treasurer  of  the  United  States  in  sums  of  not  less  than  twenty 
dollars,  and  to  issue  gold  certificates  therefor  in  denominations  of 
not  less  than  ten  dollars,  and  the  coin  so  deposited  shall  be  retained 
in  the  Treasury  and  held  for  the  payment  of  such  certificates  on 
demand,  and  used  for  no  other  purpose.  Such  certificates  shall  be 


210  N.    W.    HALSEY    &   CO. 

receivable  for   customs,  taxes,   and  all  public  dues,   and  when  so 
received  may  be  reissued,  and  when  held  by  any  national  banking 
association  may  be  counted  as  a  part  of  its  lawful  reserve:  Pro- 
vided, That  whenever  and  so  long  as  the  gold  coin  and  bullion  held 
in  the  reserve  fund  in  the  Treasury  for  the  redemption  of  United 
States  notes  and  Treasury  notes  shall  fall  and  remain  below  one 
When  authority  hundred  million  dollars  the  authority  to  issue  certificates  as  herein 
to  issue  is  provided  shall  be  suspended:   And  provided  further.   That  when- 
suspended.  ever  and  so  long  as  the  aggregate  amount  of  United  States  notes 
and  silver   certificates   in   the   general    fund  of   the   Treasury   shall 
exceed  sixty  million  dollars  the  Secretary  of  the  Treasury  may,  in 
his  discretion,  suspend  the  issue  of  the  certificates  herein  provided 
for:    And    provided    further,    That    of    the    amount    of    such    out- 
standing  certificates   one-fourth   at   least   shall   be   in   denominations 
of  fifty  dollars  or  less:  And  provided  further,  That  the  Secretary 
of   the  Treasury   may,   in  his   discretion,    issue   such  certificates   in 
denominations   of   ten    thousand   dollars,   payable   to  order.      And 
section  fifty-one  hundred  and  ninety-three  of  the  Revised  Statutes 
of  the  United  States  is  hereby  repealed.      The  act  of   March  4, 
1907    (sec.   2),  provides  that  whenever  and  so  long  as  the  out- 
standing silver  certificates  of  the  denominations  of  one  dollar,  two 
dollars,    and    five    dollars,    issued    under    the   provisions   of    section 
seven  of  an  Act  entitled  "An  Act  to  define  and  fix  the  standard 
of  value,  to  maintain  the  parity  of  all  forms  of  money  issued  or 
coined  by  the  United  States,   to  refund  the  public  debt,   and  for 
other    purposes,"    approved    March    fourteenth,    nineteen    hundred, 
shall  be,  in  the  opinion  of  the  Secretary  of  the  Treasury,  insufficient 
to  meet  the  public  demand  therefor,  he  is  hereby  authorized  to  issue 
United  States  notes  of  the  denominations  of  one  dollar,  two  dollars, 
and  five  dollars,  and  upon  the  issue  of  United  States  notes  of  such 
denominations   an  equal   amount  of  United  States   notes  of  higher 
denominations   shall   be   retired   and   canceled:    Provided,   however. 
That   the   aggregate   amount   of   United   States   notes   at   any   time 
Amount  of  outstanding  shall  remain  as  at  present  fixed  by  law:  And  provided 
U  S  notes  fwiher,   That  nothing  in  this  Act  shall  be  construed   as   affecting 
outstanding  ^e  "8>ht  °f  anv  national  bank  to  issue  one-third  in  amount  of  its 
fixed  hv  law  circu^anng  notes  of  the  denomination  of  five  dollars,  as  now  pro- 
limited.  vided  °y  law- 


CURRENCY   ACT   OF   MARCH    14,    1900 2H 

Sec.  7.  That  hereafter  silver  certificates  shall  be  issued  only  of  Silver  certificates. 
denominations  of  ten  dollars  and  under,  except  that  not  exceeding 
in  the  aggregate  ten  per  centum  of  the  total  volume  of  said  certifi- 
cates, in  the  discretion  of  the  Secretary  of  the  Treasury,  may  be 
issued  in  denominations  of  twenty  dollars,  fifty  dollars,  and  one 
hundred  dollars;  and  silver  certificates  of  higher  denomination 
than  ten  dollars,  except  as  herein  provided,  shall,  whenever  received 
at  the  Treasury  or  redeemed,  be  retired  and  canceled,  and  certifi- 
cates of  denominations  of  ten  dollars  or  less  shall  be  substituted  there- 
for, and  after  such  substitution,  in  whole  or  in  part,  a  like  volume  of 
United  States  notes  of  less  denomination  than  ten  dollars  shall 
from  time  to  time  be  retired  and  canceled,  and  notes  of  denomina- 
tions of  ten  dollars  and  upward  shall  be  reissued  in  substitution 
therefor,  with  like  qualities  and  restrictions  as  those  retired  and 
canceled. 

Sec.  8.  That  the  Secretary  of  the  Treasury  is  hereby  author-  Subsidiary  coin. 
ized  to  use,  at  his  discretion,  any  silver  bullion  in  the  Treasury  of 
the  United  States  purchased  under  the  Act  of  July  fourteenth, 
eighteen  hundred  and  ninety,  for  coinage  into  such  denominations 
of  subsidiary  silver  coin  as  may  be  necessary  to  meet  the  public 
requirements  for  such  coin:  Provided,  That  the  amount  of  sub- 
sidiary silver  coin  outstanding  shall  not  at  any  time  exceed  in  the 
aggregate  one  hundred  millions  of  dollars.  Whenever  any  silver 
bullion  purchased  under  the  Act  of  July  fourteenth,  eighteen 
hundred  and  ninety,  shall  be  used  in  the  coinage  of  subsidiary 
silver  coin,  an  amount  of  Treasury  notes  issued  under  said  Act 
equal  to  the  cost  of  the  bullion  contained  in  such  coin  shall  be 
canceled  and  not  reissued. 

Sec.  9.    That  the  Secretary  of  the  Treasury  is  hereby  authorized     Worn  and 
and  directed  to  cause  all  worn  and  uncurrent  subsidiary  silver  coin    uncurrent 
of  the  United  States  now  in  the  Treasury,  and  hereafter  received,     subsidiary  silver 
to   be    recoined,    and    to    reimburse    the    Treasurer    of    the    United     coin. 
States  for  the  difference  between  the  nominal  or  face  value  of  such 
coin  and  the  amount  the  same  will  produce  in  new  coin  from  any 
moneys  in  the  Treasury  not  otherwise  appropriated. 

Sec.    10.      That   section    fifty-one    hundred   and   thirty-eight   of 
the  Revised  Statutes  is  hereby  amended  so  as  to  read  as  follows: 


212 N.    W.    HALSEY    6-   CO. 

Amendment  to  "Section  5  1  38.  No  association  shall  be  organized  with  a  less 
section  5138,  capital  than  one  hundred  thousand  dollars,  except  that  banks  with 
R.  S.  a  capital  of  not  less  than  fifty  thousand  dollars  may,  with  the 
approval  of  the  Secretary  of  the  Treasury,  be  organized  in  any 
place  the  population  of  which  does  not  exceed  six  thousand  inhab- 
itants, and  except  that  banks  with  a  capital  of  not  less  than  twenty- 
five  thousand  dollars  may,  with  the  sanction  of  the  Secretary  of 
the  Treasury,  be  organized  in  any  place  the  population  of  which 
does  not  exceed  three  thousand  inhabitants.  No  association  shall 
be  organized  in  a  city  the  population  of  which  exceeds  fifty  thousand 
persons  with  a  capital  of  less  than  two  hundred  thousand  dollars." 

Exchange  of  Sec.  1 1 .  That  the  Secretary  of  the  Treasury  is  hereby 
outstanding  authorized  to  receive  at  the  Treasury  any  of  the  out- 
U.  S.  bonds  standing  bonds  of  the  United  States  bearing  interest  at 
authorized,  five  per  centum  per  annum,  payable  February  first,  nine- 
teen hundred  and  four,  and  any  bonds  of  the  United 
States  bearing  interest  at  four  per  centum  per  annum, 
payable  July  first,  nineteen  hundred  and  seven,  and  any 
bonds  of  the  United  States  bearing  interest  at  three  per 
centum  per  annum,  payable  August  first,  nineteen  hundred 
and  eight,  and  to  issue  in  exchange  therefor  an  equal 
amount  of  coupon  or  registered  bonds  of  the  United 
States  in  such  form  as  he  may  prescribe,  in  denominations 
of  fifty  dollars  or  any  multiple  thereof,  bearing  interest  at 
the  rate  of  two  per  centum  per  annum,  payable  quarterly, 
such  bonds  to  be  payable  at  the  pleasure  of  the  United 
States  after  thirty  years  from  the  date  of  their  issue,  and 
said  bonds  to  be  payable,  principal  and  interest,  in  gold 
coin  of  the  present  standard  value,  and  to  be  exempt  from 
the  payment  of  all  taxes  or  duties  of  the  United  States, 
as  well  as  from  taxation  in  any  form  by  or  under  State, 
municipal,  or  local  authority:  Provided,  That  such  out- 
standing bonds  may  be  received  in  exchange  at  a  valuation 
not  greater  than  their  present  worth  to  yield  an  income 
of  two  and  one-quarter  per  centum  per  annum;  and  in 
consideration  of  the  reduction  of  interest  effected,  the 
Secretary   of   the    Treasury   is   authorized   to   pay  to   the 


CURRENCY   ACT   OF   MARCH    14,    1900  213 

holders  of  the  outstanding  bonds  surrendered  for  exchange, 
out  of  any  money  in  the  Treasury  not  otherwise  appro- 
priated, a  sum  not  greater  than  the  difference  between 
their  present  worth,  computed  as  aforesaid,  and  their  par 
value,  and  the  payments  to  be  made  hereunder  shall  be 
held  to  be  payments  on  account  of  the  sinking  fund 
created  by  section  thirty-six  hundred  and  ninety-four  of 
the  Revised  Statutes;  And  provided  further.  That  the  two 
per  centum  bonds  to  be  issued  under  the  provisions  of 
this  Act  shall  be  issued  at  not  less  than  par,  and  they 
shall  be  numbered  consecutively  in  the  order  of  their  issue, 
and  when  payment  is  made  the  last  numbers  issued  shall 
be  first  paid,  and  this  order  shall  be  followed  until  all  the 
bonds  are  paid,  and  whenever  any  of  the  outstanding 
bonds  are  called  for  payment  interest  thereon  shall  cease 
three  months  after  such  call;  and  there  is  hereby  appro- 
priated out  of  any  money  in  the  Treasury  not  otherwise 
appropriated,  to  effect  the  exchanges  of  bonds  provided 
for  in  this  Act,  a  sum  not  exceeding  one-fifteenth  of  one 
per  centum  of  the  face  value  of  said  bonds,  to  pay  the 
expense  of  preparing  and  issuing  the  same  and  other 
expenses  incident  thereto. 

Sec.   1 2.     That  upon  the  deposit  with  the  Treasurer  of  £)epOS{t  0f  bonds 
the   United  States,  by  any  national  banking  association,  io  secure 
of  any  bonds  of  the  United  States  in  the  manner  provided  circulating  notes. 
by    existing    law,    such    association    shall    be    entitled    to 
receive  from  the  Comptroller  of  the  Currency  circulating 
notes  in  blank,  registered  and  countersigned  as  provided 
by  law,  equal  in  amount  to  the  par  value  of  the  bonds  so 
deposited;    and    any    national    banking    associations    now 
having  bonds   on  deposit  for  the  security  of   circulating 
notes,  and  upon  which  an  amount  of  circulating  notes  has 
been  issued  less  than  the  par  value   of  the  bonds,  shall 
be  entitled,  upon  due  application  to  the   Comptroller  of 
the   Currency,   to   receive   additional   circulating    notes    in 
blank  to   an  amount  which  will   increase  the   circulating 
notes  held  by  such  association  to  the   par  value  of  the 


214 


N.    W.    HALSEY    &   CO. 


Additional 
security. 


Denomination 
of  notes. 


bonds  deposited,  such  additional  notes  to  be  held  and 
treated  in  the  same  way  as  circulating  notes  of  national 
banking  associations  heretofore  issued,  and  subject  to  all 
the  provisions  of  law  affecting  such  notes:  Provided,  That 
nothing  herein  contained  shall  be  construed  to  modify  or 
repeal  the  provisions  of  section  fifty-one  hundred  and 
sixty-seven  of  the  Revised  Statutes  of  the  United  States, 
authorizing  the  Comptroller  of  the  Currency  to  require 
additional  deposits  of  bonds  or  of  lawful  money  in  case  the 
market  value  of  the  bonds  held  to  secure  the  circulating 
notes  shall  fall  below  the  par  value  of  the  circulating 
notes  outstanding  for  which  such  bonds  may  be  deposited 
as  security:  And  provided  further,  That  the  circulating 
notes  furnished  to  national  banking  associations  under  the 
provisions  of  this  Act  shall  be  of  the  denominations  pre- 
scribed by  law,  except  that  no  national  banking  associa- 
tion shall,  after  the  passage  of  this  Act,  be  entitled  to 
receive  from  the  Comptroller  of  the  Currency,  or  to  issue 
or  reissue  or  place  in  circulation,  more  than  one-third  in 
amount  of  its  circulating  notes  of  the  denomination  of  five 
dollars:  And  provided  further,  That  the  total  amount  of 
such  notes  issued  to  any  such  association  may  equal  at 
any  time  but  shall  not  exceed  the  amount  at  such  time  of 
its  capital  stock  actually  paid  in:  And  provided  further, 
That  under  regulations  to  be  prescribed  by  the  Secretary 
of  the  Treasury  any  national  banking  association  may 
substitute  the  two  per  centum  bonds  issued  under  the 
provisions  of  this  Act  for  any  of  the  bonds  deposited  with 
the  Treasurer  to  secure  circulation  or  to  secure  deposits 
of  public  money;  and  so  much  of  an  Act  entitled  "An 
Act  to  enable  national  banking  associations  to  extend  their 
corporate  existence,  and  for  other  purposes,"  approved  July 
twelfth,  eighteen  hundred  and  eighty-two,  as  prohibits  any 
national  bank  which  makes  any  deposit  of  lawful  money 
in  order  to  withdraw  its  circulating  notes  from  receiving 
any  increase  of  its  circulation  for  the  period  of  six  months 
from  the  time  it  made  such  deposit  of  lawful  money  for 
the  purpose  aforesaid,   is  hereby  repealed,   and  all  other 


Total  amount 
of  notes. 


Substitution  of 
bonds. 


CURRENCY   ACT   OF   MARCH    14,    1900 215 

Acts  or  parts  of  Acts  inconsistent  with  the  provisions  of 
this  section  are  hereby  repealed. 

Sec.  13.     5214  [as  amended  May  30,  1908,  see  page  224].    Tax  on  notes. 

Sec.    14.     That  the  provisions  of  this  Act  are  not  intended  to  International 
preclude  the  accomplishment  of  international  bimetallism  whenever  bimetallism. 
conditions   shall   make   it   expedient    and   practicable   to   secure   the 
same   by   concurrent   action   of   the   leading   commercial   nations   of 
the  world  and  at  a  ratio  which  shall  insure  permanence  of  relative 
value  between  gold  and  silver. 

FAILED   NATIONAL   BANKS,    ETC. 

Provided,  That  for  the  fiscal  year  of  nineteen  hundred  and  two  Provisions  of 
and  thereafter,  a  full  and  complete  list  of  all  officers,  agents,  Act  of  April 
clerks,  and  other  employees  of  the  office  of  the  Comptroller  of  the  28,  1902. 
Currency,  including  bank  examiners,  receivers  and  attorneys  for 
receivers,  and  clerks  employed  by  such  examiners  and  receivers, 
or  any  other  person  connected  with  the  work  of  said  office  in 
Washington  or  elsewhere,  whose  salary  or  compensation  is  paid 
from  the  Treasury  of  the  United  States  or  assessed  against  or 
collected  from  existing  or  failed  banks  under  their  supervision  or 
control,  shall  be  transmitted  to  the  Secretary  of  the  Interior  in 
accordance  with  the  provisions  of  an  Act  of  Congress  approved 
January  twelfth,  eighteen  hundred  and  eighty-five,  relating  to  the 
Official  Register:  And  provided  further,  That  the  Comptroller  of 
the  Currency  is  hereby  directed  to  include  in  his  Annual  Report  to 
the  Speaker  of  the  House  of  Representatives,  expenses  incurred 
during  each  year,  in  liquidation  of  each  failed  national  bank 
separately. 

CORPORATION    CONTRIBUTIONS    TO    POLITICAL 
ELECTIONS  PROHIBITED 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  Act  of 
the  United  States  of  America  in  Congress  assembled,  That  it  shall  January  26, 
be  unlawful   for  any  national  bank,   or  any  corporation  organized   1907. 
by  authority  of  any  laws  of  Congress,  to  make  a  money  contribu- 
tion in  connection  with  any  election  to  any  political  office.     It  shall 


216 N.    W.    HAL5EY    &   CO. 

also  be  unlawful  for  any  corporation  whatever  to  make  a  money 
contribution  in  connection  with  any  election  at  which  Presidential 
and  Vice-Presidential  electors  or  a  Representative  in  Congress  is 
to  be  voted  for  or  any  election  by  any  State  legislature  of  a  United 
States  Senator.  Every  corporation  which  shall  make  any  con- 
tribution in  violation  of  the  foregoing  provisions  shall  be  subject  to 
a  fine  not  exceeding  five  thousand  dollars,  and  every  officer  or 
director  of  any  corporation  who  shall  consent  to  any  contribution 
by  the  corporation  in  violation  of  the  foregoing  provisions  shall 
upon  conviction  be  punished  by  a  fine  of  not  exceeding  one  thousand 
and  not  less  than  two  hundred  and  fifty  dollars,  or  by  imprison- 
ment for  a  term  of  not  more  than  one  year,  or  both  such  fine  and 
imprisonment  in  the  discretion  of  the  court. 


Additional  Circulation  Act 

(Emergency  Currency  Act) 


Be  it  enacted  by   the  Senate  and  House  of  Representatives  of  National 
the  United  States  of  America  in  Congress  assembled,  That  national  currency 
banking    associations,    each    having    an    unimpaired    capital    and    a  associations. 
surplus  of  not  less  than  twenty  per  centum,   not  less   than   ten   in 
number,   having   an   aggregate   capital   and  surplus  of  at  least  five 
millions  of  dollars,  may  form  voluntary  associations  to  be  designated 
as  national  currency  associations.     The  banks  uniting  to  form  such 
association  shall,  by  their  presidents  or  vice-presidents,  acting  under 
authority    from    the    board    of    directors,    make    and    file    with    the  Certificate  to  be 
Secretary  of  the  Treasury  a  certificate  setting   forth  the  names  of  filed  ivith 
the  banks  composing  the  association,  the  principal  place  of  business  Secretary  of  the 
of  the  association,   and  the  name  of  the   association,   which  name   Treasury. 
shall  be  subject  to  the  approval  of  the  Secretary  of  the  Treasury. 
Upon    the    filing   of    such    certificate    the    associated    banks    therein 
named    shall    become    a    body    corporate,    and    by    the    name    so 
designated   and  approved  may  sue  and   be  sued   and   exercise   the 
powers  of  a  body  corporate  for  the  purposes  hereinafter  mentioned: 
Provided,  That  not  more  than  one  such  national  currency  associa- 
tion shall  be  formed  in  any  city:  Provided  further,  That  the  several 
members  of   such   national   currency   association  shall   be   taken,   as  Membership. 
nearly   as   conveniently   may   be,    from   a   territory   composed   of   a 
State  or  part  of  a  State,  or  contiguous  parts  of  one  or  more  States: 
And   provided   further,    That   any    national   bank   in   such   city    or 
territory,  having  the  qualifications  herein  prescribed  for  membership 
in   such   national    currency    association,    shall,    upon   its    application 
to  and   upon  the  approval   of   the   Secretary  of   the   Treasury,   be 
admitted  to  membership  in  a  national  currency  association  for  that 
city  or   territory,   and   upon   such   admission   shall   be   deemed   and 
held   a   part  of   the   body   corporate,   and   as   such   entitled    to   all 


218 


N.    W.    HALSEY    &   CO. 


Bank  may 

belong  to  but 

one  association. 


Management. 
By-Law  s. 

Officers. 

Powers  of  board. 

Purposes. 


Securities 

basis  for 

additional 

circulation. 

Application  by 

members  of 

association  for 

additional 

circulation. 

Deposit  of 
securities. 


the  rights  and  privileges  and  subject  to  all  the  liabilities  of  an 
original  member:  And  provided  further,  That  each  national  currency 
association  shall  be  composed  exclusively  of  banks  not  members 
of  any  other  national  currency  association. 

The  dissolution,  voluntary  or  otherwise,  of  any  bank  in  such 
association  shall  not  affect  the  corporate  existence  of  the  association 
unless  there  shall  then  remain  less  than  the  minimum  number  of  ten 
banks:  Provided,  however,  That  the  reduction  of  the  number  of 
said  banks  below  the  minimum  of  ten  shall  not  affect  the  existence 
of  the  corporation  with  respect  to  the  association  of  all  rights  in  favor 
of  or  against  such  association.  The  affairs  of  the  association  shall 
be  managed  by  a  board  consisting  of  one  representative  from  each 
bank.  By-laws  for  the  government  of  the  association  shall  be 
made  by  the  board,  subject  to  the  approval  of  the  Secretary  of  the 
Treasury.  A  president,  vice-president,  secretary,  treasurer,  and 
an  executive  committee  of  not  less  than  five  members,  shall  be 
elected  by  the  board.  The  powers  of  such  board,  except  in  the 
election  of  officers  and  making  of  by-laws,  may  be  exercised  through 
its    executive    committee. 

The  national  currency  association  herein  provided  for 
shall  have  and  exercise  any  and  all  powers  necessary  to 
carry  out  the  purposes  of  this  section,  namely,  to  render 
available,  under  the  direction  and  control  of  the  Secretary 
of  the  Treasury,  as  a  basis  for  additional  circulation  any 
securities,  including  commercial  paper,  held  by  a  national 
banking  association.  For  the  purpose  of  obtaining  such 
additional  circulation,  any  bank  belonging  to  any  national 
currency  association,  having  circulating  notes  outstanding 
secured  by  the  deposit  of  bonds  of  the  United  States  to  an 
amount  not  less  than  forty  per  centum  of  its  capital  stock, 
and  which  has  its  capital  unimpaired  and  a  surplus  of  not 
less  than  twenty  per  centum,  may  deposit  with  and  trans- 
fer to  the  association,  in  trust  for  the  United  States,  for 
the  purpose  hereinafter  provided,  such  of  the  securities 
above  mentioned  as  may  be  satisfactory  to  the  board  of 
the  association.  The  officers  of  the  association  may  there- 
upon,  in   behalf   of   such  bank,    make   application   to   the 


ADDITIONAL   CIRCULATION   ACT 219 

Comptroller   of  the   Currency  for  an   issue    of  additional  Additional 
circulating   notes    to   an   amount    not   exceeding    seventy-  circulation 
five  per  centum  of  the  cash  value  of  the  securities  or  com-  limited  to 
mercial  paper  so  deposited.     The  Comptroller  of  the  Cur-  seventy-five 
rency  shall  immediately  transmit  such  application  to  the  P**  centum  of 
Secretary  of  the  Treasury  with  such  recommendation  as  casn  va^ue  °f 
he  thinks  proper,  and  if,  in  the  judgment  of  the  Secretary  commercial 
of  the  Treasury,  business  conditions  in  the  locality  demand  securities. 
additional    circulation,    and    if    he    be    satisfied    with    the 
character  and  value  of  the  securities  proposed  and  that 
a  lien  in  favor  of  the  United  States  on  the  securities  so 
deposited  and  on  the  assets  of  the  banks  composing  the 
association  will  be  amply  sufficient  for  the  protection  of 
the  United  States,  he  may  direct  an  issue  of  additional 
circulating    notes   to   the    association,    on   behalf   of    such 
bank,    to    an    amount    in    his    discretion,    not,    however, 
exceeding  seventy-five  per  centum  of  the  cash  value   of 
the    securities    so    deposited:    Provided,    That    upon    the 
deposit  of  any  of  the  State,  city,  town,  county,  or  other 
municipal  bonds,  of  a  character  described  in  section  three 
of  this  Act,  circulating  notes  may  be  issued  to  the  extent  Ninety  per 
of  not  exceeding  ninety  per  centum  of  the  market  value  of  centum 
such   bonds   so   deposited:   And  provided,   further,   That   no  in  case  of 
national  banking  association   shall   be    authorized   in   any  municipals. 
event  to  issue  circulating  notes  based  on  commercial  paper 
in  excess  of  thirty  per  centum  of  its  unimpaired  capital  Additional 
and  surplus.     The  term  "commercial  paper"  shall  be  held  limitations. 
to    include    only    notes    representing    actual    commercial 
transactions,    which    when    accepted    by    the    association  Commercial 
shall  bear  the  names  of  at  least  two  responsible  parties  paper. 
and  have  not  exceeding  four  months  to  run. 

The  banks  and  the  assets  of  all  banks  belonging  to  the  Liability  of 
association   shall   be   jointly   and    severally   liable   to   the  members  of 
United    States    for    the    redemption    of    such    additional  association. 
circulation;  and  to  secure  such  liability  the  lien  created 
by  section  fifty-two  hundred   and  thirty   of  the   Revised 
Statutes  shall  extend  to  and  cover  the  assets  of  all  banks 
belonging  to  the  association,  and  to  the  securities  deposited 


220  N.    W.    HALSEY    &   CO. 

by  the  banks  with  the  association  pursuant  to  the  provi- 
sions of  this  Act;  but  as  between  the  several  banks  com- 
posing  such   association   each   bank   shall   be   liable   only 
in   the   proportion   that   its   capital   and   surplus   bears   to 
the  aggregate  capital  and  surplus  of  all  such  banks.     The 
association  may,  at  any  time,  require  of  any  of  its  con- 
Additional  stituent  banks  a  deposit  of  additional  securities  or  com- 
securities.  mercial   paper,   or   an  exchange   of  the   securities   already 
on  deposit,  to  secure  such  additional  circulation;  and  in 
Failure  to  case  °*  tne  failure  of  such  bank  to  make  such  deposit  or 
deposit,   exchange  the  association  may,  after  ten  days'  notice  to  the 
bank,  sell  the  securities  and  paper  already  in  its  hand  at 
public  sale,  and  deposit  the  proceeds  with  the  Treasurer 
of  the  United  States  as  a  fund  for  the  redemption  of  such 
additional    circulation.      If    such   fund    be    insufficient    for 
Associations  that  purpose  the  association  may  recover  from  the  bank 
may  be  sued  in  the  amount  of  the  deficiency  by  suit  in  the  circuit  court 
U.  S.  circuit  of  the  United  States,  and  shall  have  the  benefit  of  the  lien 
court,  hereinbefore  provided  for  in  favor  of  the   United   States 
upon  the   assets  of  such  bank.     The   association   or   the 
Secretary  of  the  Treasury  may  permit  or  require  the  with- 
drawal of  any  such  securities  or  commercial  paper   and 
Substitution  of  the  substitution  of  other  securities  or  commercial  paper 
securities,   of  equal  value  therefor. 

Redemption       Sec.     2.     That    whenever    any    bank    belonging    to    a 

fund,  national    currency    association    shall    fail    to    preserve    or 

make   good  its  redemption  fund  in  the   Treasury   of  the 

United   States,   required   by   section   three   of  the    Act   of 

June  twentieth,  eighteen  hundred  and  seventy-four,  chapter 

three    hundred    and    forty-three,    and    the    provisions    of 

this  Act,  the  Treasurer  of  the  United  States  shall  notify 

such    national    currency    association    to    make    good    such 

Failure  to  redemption  fund,   and  upon  the   failure   of  such  national 

make  good,   currency     association     to     make     good     such     fund,     the 

Treasurer  of  the  United  States  may,  in  his  discretion,  apply 

so  much  of  the  redemption  fund  belonging  to  the  other 

banks   composing   such   national   currency   association   as 


ADDITIONAL   CIRCULATION    ACT 


221 


may  be  necessary  for  that  purpose;  and  such  national 
currency  association  may,  after  five  days'  notice  to  such 
bank,  proceed  to  sell  at  public  sale  the  securities  deposited 
by  such  bank  with  the  association  pursuant  to  the  provi- 
sions of  section  one  of  this  Act,  and  deposit  the  proceeds 
with  the  Treasurer  of  the  United  States  as  a  fund  for  the 
redemption  of  the  additional  circulation  taken  out  by  such 
bank  under  this  Act. 


Sec.  3.  That  any  national  banking  association  which 
has  circulating  notes  outstanding,  secured  by  the  deposit 
of  United  States  bonds  to  an  amount  of  not  less  than 
forty  per  centum  of  its  capital  stock,  and  which  has  a 
surplus  of  not  less  than  twenty  per  centum,  may  make 
application  to  the  Comptroller  of  the  Currency  for  author- 
ity to  issue  additional  circulating  notes  to  be  secured  by 
the  deposit  of  bonds  other  than  bonds  of  the  United  States. 
The  Comptroller  of  the  Currency  shall  transmit  immedi- 
ately the  application,  with  his  recommendation,  to  the 
Secretary  of  the  Treasury,  who  shall,  if  in  his  judgment 
business  conditions  in  the  locality  demand  additional 
circulation,  approve  the  same,  and  shall  determine  the 
time  of  issue  and  fix  the  amount,  within  the  limitations 
herein  imposed,  of  the  additional  circulating  notes  to  be 
issued.  Whenever  after  receiving  notice  of  such  approval 
any  such  association  shall  deposit  with  the  Treasurer  or 
any  assistant  treasurer  of  the  United  States  such  of  the 
bonds  described  in  this  section  as  shall  be  approved  in 
character  and  amount  by  the  Treasurer  of  the  United 
States  and  the  Secretary  of  the  Treasury,  it  shall  be 
entitled  to  receive,  upon  the  order  of  the  Comptroller  of 
the  Currency,  circulating  notes  in  blank,  registered  and 
countersigned  as  provided  by  law,  not  exceeding  in  amount 
ninety  per  centum  of  the  market  value,  but  not  in  excess 
of  the  par  value  of  any  bonds  so  deposited,  such  market 
value  to  be  ascertained  and  determined  under  the  direction 
of  the  Secretary  of  the  Treasury. 


Application  by 
association  as  a 
corporate  body 
for  additional 
circulation. 


Deposit  of 
securities. 


Additional 
circulation 
limited  to 
ninety  per 
centum  of 
market  value 
of  securities. 


222 N.    W.    HALSEY    &   CO. 

Bonds  available  The  Treasurer  of  the  United  States,  with  the  approval 
for  security,  of  the  Secretary  of  the  Treasury,  shall  accept  as  security 
for  the  aditional  circulating  notes  provided  for  in  this 
section,  bonds  or  other  interest-bearing  obligations  of  any 
State  of  the  United  States,  or  any  legally  authorized  bonds 
issued  by  any  city,  town,  county,  or  other  legally  consti- 
tuted municipality  or  district  in  the  United  States  which 
has  been  in  existence  for  a  period  of  ten  years,  and  which 
for  a  period  of  ten  years  previous  to  such  deposit  has  not 
defaulted  in  the  payment  of  any  part  of  either  principal 
or  interest  of  any  funded  debt  authorized  to  be  contracted 
by  it,  and  whose  net  funded  indebtedness  does  not  exceed 
ten  per  centum  of  the  valuation  of  its  taxable  property, 
to  be  ascertained  by  the  last  preceding  valuation  of 
property  for  the  assessment  of  taxes.  The  Treasurer  of 
the  United  States,  with  the  approval  of  the  Secretary  of  the 
Treasury,  shall  accept,  for  the  purposes  of  this  section, 
securities  herein  enumerated  in  such  proportions  as  he  may 
from  time  to  time  determine,  and  he  may  with  such 
approval  at  any  time  require  the  deposit  of  additional 
securities,  or  require  any  association  to  change  the  charac- 
ter of  the  securities  already  on  deposit. 

Legal  title  of  Sec.  4.  That  the  legal  title  of  all  bonds,  whether  coupon 
bonds  to  be  or  registered,  deposited  to  secure  circulating  notes  issued 
transferred.  in  accordance  with  the  terms  of  section  three  of  this  Act 
shall  be  transferred  to  the  Treasurer  of  the  United  States 
in  trust  for  the  association  depositing  them,  under  regula- 
tions to  be  prescribed  by  the  Secretary  of  the  Treasury. 
A  receipt  shall  be  given  to  the  association  by  the  Treasurer 
or  any  assistant  treasurer  of  the  United  States,  stating 
that  such  bond  is  held  in  trust  for  the  association  on  whose 
behalf  the  transfer  is  made,  and  as  security  for  the  redemp- 
tion and  payment  of  any  circulating  notes  that  have  been 
or  may  be  delivered  to  such  association.  No  assignment 
or  transfer  of  any  such  bond  by  the  Treasurer  shall  be 
deemed  valid  unless  countersigned  by  the  Comptroller  of 
the  Currency.    The  provisions  of  sections  fifty-one  hundred 


ADDITIONAL   CIRCULATION   ACT 223 

and  sixty-three,  fifty-one  hundred  and  sixty-four,  fifty-one 
hundred  and  sixty-five,  fifty-one  hundred  and  sixty-six, 
and  fifty-one  hundred  and  sixty-seven  and  sections  fifty- 
two  hundred  and  twenty-four  to  fifty-two  hundred  and 
thirty-four,  inclusive,  of  the  Revised  Statutes  respecting 
United  States  bonds  deposited  to  secure  circulating  notes 
shall,  except  as  herein  modified,  be  applicable  to  all  bonds 
deposited  under  the  terms  of  section  three  of  this  Act. 

Sec.  5.    That  the  additional  circulating  notes  issued  under    Status  of 
this  Act  shall  be  used,  held,  and  treated  in  the  same  way    additional 
as  circulating  notes  of  national  banking  associations  here-    circulating  notes. 
tofore  issued  and  secured  by  a  deposit  of  United  States 
bonds,  and  shall  be  subject  to  all  the  provisions  of  law 
affecting  such  notes  except  as  herein  expressly  modified: 
Provided,    That  the  total  amount  of  circulating  notes  out- 
standing  of   any   national   banking   association,    including 
notes  secured  by  United  States  bonds  as  now  provided  by 
law,  and  notes  secured  otherwise  than  by  deposit  of  such 
bonds,   shall  not  at  any  time   exceed  the   amount  of  its 
unimpaired    capital    and    surplus :     And    provided    further.    Limit  of  issue. 
That  there  shall  not  be  outstanding  at  any  time  circulating 
notes  issued  under  the  provisions  of  this  Act  to  an  amount 
of  more  than  five  hundred  millions  of  dollars. 

Sec.    6.     That  whenever  and  so  long  as  any  national    Amount  in 
banking  association  has  outstanding  any  of  the  additional    redemption  fund 
circulating  notes  authorized  to  be  issued  by  the  provisions    must  cover 
of  this  Act,  it  shall  keep  on  deposit  in  the  Treasury  of  the    additional 
United  States,  in  addition  to  the  redemption  fund  required    circulation. 
by  section  three  of  the  Act  of  June   twentieth,  eighteen 
hundred  and  seventy-four,  an  additional  sum  equal  to  five 
per  centum  of  such  additional  circulation  at  any  time  out- 
standing, such  additional  five  per  centum  to  be   treated, 
held,  and  used  in  all  respects  in  the  same  manner  as  the 
original  redemption  fund  provided  for  by  said  section  three 
of    the    Act    of    June    twentieth,    eighteen    hundred    and 
seventy-four. 


224 N.    W.    HAL5EY    &   CO. 

Distribution  Sec.  7.  In  order  that  the  distribution  of  notes  to  be 
of  notes  issued  under  the  provisions  of  this  Act  shall  be  made  as 
geographically,  equitable  as  practicable  between  the  various  sections  of 
the  country,  the  Secretary  of  the  Treasury  shall  not 
approve  applications  from  associations  in  any  State 
in  excess  of  the  amount  to  which  such  State  would  be 
entitled  of  the  additional  notes  herein  authorized  on  the 
basis  of  the  proportion  which  the  unimpaired  capital  and 
surplus  of  the  national  banking  associations  in  such  State 
bears  to  the  total  amount  of  unimpaired  capital  and  surplus 
of  the  national  banking  associations  of  the  United  States: 
Provided,  however,  That  in  case  the  applications  from 
associations  in  any  State  shall  not  be  equal  to  the  amount 
which  the  associations  of  such  State  would  be  entitled 
to  under  this  method  of  distribution,  the  Secretary  of  the 
Treasury  may,  in  his  discretion,  to  meet  an  emergency, 
assign  the  amount  not  thus  applied  for  to  any  applying 
association  or  associations  in  States  in  the  same  section 
of  the  country. 

Information       Sec.  8.     That  it  shall  be  the  duty  of  the  Secretary  of 

relative  to  value  the  Treasury  to  obtain  information  with  reference  to  the 

of  securities  value    and    character    of    the    securities    authorized    to    be 

pledged,  accepted  under  the   provisions  of  this  Act,   and  he   shall 

from  time  to  time  furnish  information  to  national  banking 

associations  as  to  such  securities  as  would  be  acceptable 

under  the  provisions  of  this  Act. 

Amendment  to       Sec.  9.     That  section  fifty-two  hundred  and  fourteen  of 
section  52 1 4  the  Revised  Statutes,  as  amended,  be  further  amended  to 
^-  5.   read  as  follows : 

Tax  on  "Sec.  5214.  National  banking  associations  having  on 
circulation,  deposit  bonds  of  the  United  States,  bearing  interest  at  the 
rate  of  two  per  centum  per  annum,  including  the  bonds 
issued  for  the  construction  of  the  Panama  Canal,  under 
the  provisions  of  section  eight  of  'An  Act  to  provide  for 
the  construction  of  a  canal  connecting  the  waters  of  the 


ADDITIONAL   CIRCULATION   ACT 225 

Atlantic  and  Pacific  Oceans,'  approved  June  twenty-eighth,  Secured  by 
nineteen  hundred  and  two,  to  secure  its  circulating  notes,  U.  S.  bonds. 
shall  pay  to  the  Treasurer  of  the  United  States,  in  the 
months  of  January  and  July,  a  tax  of  one-fourth  of  one 
per  centum  each  half  year  upon  the  average  amount  of 
such  of  its  notes  in  circulation  as  are  based  upon  the  deposit 
of  such  bonds;  and  such  associations  having  on  deposit 
bonds  of  the  United  States  bearing  interest  at  a  rate  higher 
than  two  per  centum  per  annum  shall  pay  a  tax  of  one-half 
of  one  per  centum  each  half  year  upon  the  average  amount 
of  such  of  its  notes  in  circulation  as  are  based  upon  the 
deposit  of  such  bonds.  National  banking  associations  Secured  by  other 
having  circulating  notes  secured  otherwise  than  by  bonds  than  U>  5.  bonds. 
of  the  United  States  shall  pay  for  the  first  month  a  tax 
at  the  rate  of  five  per  centum  per  annum  upon  the  average 
amount  of  such  of  their  notes  in  circulation  as  are  based 
upon  the  deposit  of  such  securities,  and  afterwards  an 
additional  tax  of  one  per  centum  per  annum  for  each 
month  until  a  tax  of  ten  per  centum  per  annum  is  reached, 
and  thereafter  such  tax  of  ten  per  centum  per  annum,  upon 
the  average  amount  of  such  notes.  Every  national 
banking  association  having  outstanding  circulating  notes 
secured  by  a  deposit  of  other  securities  than  United 
States  bonds  shall  make  monthly  returns,  under  oath  of  Monthly  returns 
its  president  or  cashier,  to  the  Treasurer  of  the  United  under  oath. 
States,  in  such  form  as  the  Treasurer  may  prescribe,  of 
the  average  monthly  amount  of  its  notes  so  secured  in 
circulation;  and  it  shall  be  the  duty  of  the  Comptroller 
of  the  Currency  to  cause  such  reports  of  notes  in  circula- 
tion to  be  verified  by  examination  of  the  bank's  records. 
The  taxes  received  on  circulating  notes  secured  otherwise 
than  by  bonds  of  the  United  States  shall  be  paid  into 
the  Division  of  Redemption  of  the  Treasury  and  credited 
and  added  to  the  reserve  fund  held  for  the  redemption  of 
United  States  and  other  notes." 

Sec.    10.    That  section  nine  of  the  Act  approved  July  twelfth.  Amendment 
eighteen  hundred  and  eighty-two,  as  amended  by  the  Act  approved  to  R.  S. 


226 . N.    W.    HALSEY   &   CO. 

March  fourth,  nineteen  hundred  and  seven,  be  further  amended  to 
read  as  follows: 

Withdrawal  of  "Sec.  9.  That  any  national  banking  association  desiring 
circulating  notes,  to  withdraw  its  circulating  notes,  secured  by  deposit  of 
United  States  bonds  in  the  manner  provided  in  section 
four  of  the  Act  approved  June  twentieth,  eighteen  hundred 
and  seventy-four,  is  hereby  authorized  for  that  purpose 
to  deposit  lawful  money  with  the  Treasurer  of  the  United 
States  and,  with  the  consent  of  the  Comptroller  of  the 
Currency  and  the  approval  of  the  Secretary  of  the 
Treasury  to  withdraw  a  proportionate  amount  of  bonds 
held  as  security  for  its  circulating  notes  in  the  order  of 
such  deposits:  Provided,  That  not  more  than  nine  millions 
of  dollars  of  lawful  money  shall  be  so  deposited  during  any 
calendar  month  for  this  purpose. 

"Any  national  banking  association  desiring  to  withdraw 
any  of  its  circulating  notes,  secured  by  the  deposit  of 
securities  other  than  bonds  of  the  United  States,  may  make 
such  withdrawal  at  any  time  in  like  manner  and  effect  by 
the  deposit  of  lawful  money  or  national  bank  notes  with 
the  Treasurer  of  the  United  States,  and  upon  such  deposit 
a  proportionate  share  of  the  securities  so  deposited  may  be 
withdrawn:  Provided,  That  the  deposits  under  this  section 
to  retire  notes  secured  by  the  deposit  of  securities  other 
than  bonds  of  the  United  States  shall  not  be  covered  into 
the  Treasury,  as  required  by  section  six  of  an  Act  entitled 
'An  Act  directing  the  purchase  of  silver  bullion  and  the 
issue  of  Treasury  notes  thereon,  and  for  other  purposes,' 
approved  July  fourteenth,  eighteen  hundred  and  ninety, 
but  shall  be  retained  in  the  Treasury  for  the  purpose  of 
redeeming  the  notes  of  the  bank  making  such  deposit." 

Amendment  to       Sec.  1  1.     That  section  fifty-one  hundred  and  seventy-two  of  the 
section  5 172,  Revised  Statutes  be,  and  the  same  is  hereby,  amended  to  read  as 
R.  S.  follows: 


ADDITIONAL   CIRCULATION   ACT 227 

"Sec.  5 1  72.  In  order  to  furnish  suitable  notes  for  circulation,  Printing  of 
the  Comptroller  of  the  Currency  shall,  under  the  direction  of  the  circulating  notes. 
Secretary  of  the  Treasury,  cause  plates  and  dies  to  be  engraved, 
in  the  best  manner  to  guard  against  counterfeiting  and  fraudulent 
alterations,  and  shall  have  printed  therefrom,  and  numbered,  such 
quantity  of  circulating  notes,  in  blank,  of  the  denominations  of 
five  dollars,  ten  dollars,  twenty  dollars,  fifty  dollars,  one  hundred 
dollars,  five  hundred  dollars,  one  thousand  dollars,  and  ten 
thousand  dollars,  as  may  be  required  to  supply  the  associations 
entitled  to  receive  the  same.  Such  notes  shall  state  upon  their  face 
that  they  are  secured  by  United  States  bonds  or  other  securities, 
certified  by  the  written  or  engraved  signatures  of  the  Treasurer 
and  Register  and  by  the  imprint  of  the  seal  of  the  Treasury. 
They  shall  also  express  upon  their  face  the  promise  of  the  association 
receiving  the  same  to  pay  on  demand,  attested  by  the  signature 
of  the  president  or  vice-president  and  cashier.  The  Comptroller  of 
the  Currency,  acting  under  the  direction  of  the  Secretary  of  the 
Treasury,  shall  as  soon  as  practicable  cause  to  be  prepared  circu- 
lating notes  in  blank,  registered  and  countersigned,  as  provided  by 
law,  to  an  amount  equal  to  fifty  per  centum  of  the  capital  stock 
of  each  national  banking  association;  such  notes  to  be  deposited  Distribution. 
in  the  Treasury  or  in  the  subtreasury  of  the  United  States  nearest 
the  place  of  business  of  each  association,  and  to  be  held  for  such 
association,  subject  to  the  order  of  the  Comptroller  of  the  Currency, 
for  their  delivery  as  provided  by  law:  Provided,  That  the 
Comptroller  of  the  Currency  may  issue  national  bank  notes  of  the 
present  form  until  plates  can  be  prepared  and  circulating  notes 
issued  as  above  provided:  Provided,  however.  That  in  no  event 
shall  bank  notes  of  the  present  form  be  issued  to  any  bank  as- 
additional  circulation  provided  for  by  this  Act." 

Sec.  1 2.     That  circulating  notes  of  national  banking  associations,     Redemption  at 
when    presented     to     the    Treasury    for    redemption,    as    provided     treasury. 
in    section    three    of    the    Act    approved    June    twentieth,    eighteen 
hundred  and  seventy-four,  shall  be  redeemed  in  lawful  money  of 
the  United  States. 


228 N.    W.    HALSEY    &   CO. 

Authority).  Sec.  13.  That  all  acts  and  orders  of  the  Comptroller  of  the 
Currency  and  the  Treasurer  of  the  United  States  authorized  by 
this  Act  shall  have  the  approval  of  the  Secretary  of  the  Treasury, 
who  shall  have  power,  also,  to  make  any  such  rules  and  regulations 
and  exercise  such  control  over  the  organization  and  management 
of  national  currency  associations  as  may  be  necessary  to  carry  out 
the  purposes  of  this  Act. 

Public  deposits.  Sec.  1 4.  That  the  provisions  of  section  fifty-one  hundred  and 
ninety-one  of  the  Revised  Statutes,  with  reference  to  the  reserves 
of  national  banking  associations,  shall  not  apply  to  deposits  of  public 
moneys  by  the  United  States  in  designating  depositaries. 

Interest  on  Sec.  15.  That  all  national  banking  associations  designated  as 
deposits,  regular  depositaries  of  public  money  shall  pay  upon  all  special 
and  additional  deposits  made  by  the  Secretary  of  the  Treasury 
in  such  depositaries,  and  all  such  associations  designated  as 
temporary  depositaries  of  public  money  shall  pay  upon  all  sums 
of  public  money  deposited  in  such  associations  interest  at  such  rate 
as  the  Secretary  of  the  Treasury  may  prescribe,  not  less,  however, 
than  one  per  centum  per  annum  upon  the  average  monthly  amount 
of  such  deposits:  Provided,  however,  That  nothing  contained  in 
this  Act  shall  be  construed  to  change  or  modify  the  obligation  of 
any  association  or  any  of  its  officers  for  the  safe-keeping  of  public 
money:  Provided  further,  that  the  rate  of  interest  charged  upon 
such  deposits  shall  be  equal  and  uniform  throughout  the  United 
States. 

Appropriation       Sec.    16.     That  a  sum  sufficient  to  carry  out  the  purposes  of 
to  carry  out  act.  the  preceding  sections  of   this  Act  is  hereby  appropriated  out  of 
any  money  in  the  Treasury  not  otherwise  appropriated. 

National       Sec.    1 7.      That  a  Commission  is  hereby  created,  to  be  called 
Monetary  "«    "National    Monetary   Commission,"    to    be   composed    of    nine 
Commission,  members  of  the  Senate,  to  be  appointed  by  the   Presiding  Officer 
thereof,  and  nine  members  of  the  House  of  Representatives,  to  be 
appointed  by  the  Speaker  thereof;   and  any  vacancy  on  the  Com- 
mission shall  be  filled  in  the  same  manner  as  the  original  appointment. 

Sec.  1 8.     That  it  shall  be  the  duty  of  this  Commission  to  inquire 
into  and  report  to  Congress  at  the  earliest  date  practicable,   what 


ADDITIONAL   CIRCULATION   ACT  229 

changes  are  necessary  or  desirable  in  the  monetary  system  of  the  Duty  of 
United  States  or  in  the  laws  relating  to  banking  and  currency,  commission. 
and  for  this  purpose  they  are  authorized  to  sit  during  the  sessions 
or  recess  of  Congress,  at  such  times  and  places  as  they  may  deem 
desirable,  to  send  for  persons  and  papers,  to  administer  oaths, 
to  summons  and  compel  the  attendance  of  witnesses,  and  to  employ 
a  disbursing  officer  and  such  secretaries,  experts,  stenographers, 
messengers  and  other  assistants  as  shall  be  necessary  to  carry  out 
the  purposes  for  which  said  Commission  was  created.  The  Com- 
mission shall  have  the  power,  through  subcommittee  or  otherwise, 
to  examine  witnesses  and  to  make  such  investigations  and  examina- 
tions, in  this  or  other  countries,  of  the  subjects  committed  to  their 
charge  as  they  shall  deem  necessary. 

Sec.  1 9.  That  a  sum  sufficient  to  carry  out  the  purposes  Expenses  of 
of  sections  seventeen  and  eighteen  of  this  Act,  and  to  pay  the  commission. 
necessary  expenses  of  the  Commission  and  its  members,  is  hereby 
appropriated,  out  of  any  money  in  the  Treasury  not  otherwise 
appropriated.  Said  appropriation  shall  be  immediately  available 
and  shall  be  paid  out  on  the  audit  and  order  of  the  chairman  or 
acting  chairman  of  said  Commission,  which  audit  and  order  shall 
be  conclusive  and  binding  upon  all  Departments  as  to  the  correctness 
of  the  accounts  of  such  Commission. 

Sec.  20.     That  this  Act  shall  expire  by  limitation  on  the  thirtieth  Expiration  of  act. 
day  of  June,  nineteen  hundred  and  fourteen. 

Approved,  May  30,  1908.  Date  of  act 


Postal  Savings  Bank  Act 

An  Act  to  Establish  Postal  Savings  Depositories  for 
Depositing  Savings  at  Interest  with  the  Security 
of  the  Government  for  Repayment  Thereof,  and 
for  Other  Purposes. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the  Creation  of  board 
United  States  of  America  in  Congress  assembled.  That  there  be,  °f  trustees. 
and  is  hereby,  created  a  board  of  trustees  for  the  control,  super- 
vision, and  administration  of  the  postal  savings  depository  offices 
designated  and  established  under  the  provisions  of  this  Act,  and  of 
the  funds  received  as  deposits  at  such  postal  savings  depository 
offices  by  virtue  thereof.  Said  board  shall  consist  of  the  Post- 
master-General, the  Secretary  of  the  Treasury,  and  the  Attorney- 
General,  severally,  acting  ex-officio,  and  shall  have  power  to  make 
all  necessary  and  proper  regulations  for  the  receipt,  transmittal, 
custody,  deposit,  investment,  and  repayment  of  the  funds  deposited 
at  postal  savings  depository  offices. 

The  board  of  trustees  shall  submit  a  report  to  Congress  at  the"  Reports  of  board 
beginning  of  each  regular  session  showing  by  States  and  Territories  °f  trustees. 
(for   the  preceding   fiscal   year)    the   number   and   names  of   post- 
offices   receiving  deposits,    the  aggregate   amount   of   deposits   made 
therein,     the     aggregate     amount    of     withdrawals     therefrom,     the 
number   of   depositors   in   each,    the   total   amount   standing   to    the 
credit  of  all  depositors  at  the  conclusion  of  the  year,  the  amount 
of  such  deposits  at  interest,  the  amount  of  interest  received  thereon, 
the  amount   of   interest  paid  thereon,   the   amount  of   deposits  sur- 
rendered by  depositors  for  bonds  issued  by  authority  of  this  Act, 
and  the  number  and  amount  of  unclaimed  deposits.   Also  the  amount    What  information 
invested   in   government   securities   by   the   trustees,    the    amount   of  shall  be  included 
extra  expense  of  the  Post-Office  Department  and  the  postal  service  in  reports. 
incident  to  the  operation  of  the  postal  savings  depository  system,  the 


232 N.    W.    HALSEY    &   CO. 

amount  of  work  done  for  the  savings  depository  system  by  the 
Post-Office  Department  and  postal  service  in  the  transportation  of 
free  mail,  and  all  other  facts  which  it  may  deem  pertinent  and 
proper  to  present. 

Sec.  2.  That  the  Postmaster-General  is  hereby  directed  to 
prepare  and  issue  special  stamps  of  the  necessary  denominations 
for  use,  in  lieu  of  penalty  or  franked  envelopes,  in  the  transmittal  of 
free  mail  resulting  from  the  administration  of  this  Act. 

Designation  of         Sec.  3.      That  said  board  of  trustees  is  hereby  authorized  and 
postoffices  as    empowered   to   designate   such   post-offices   as  it  may   select   to   be 
saving  depository    postal  savings  depository  offices,  and  each  and  every  post-office  so 
offices,    designated  by  order  of  said  board  is  hereby  declared  to  be  a  postal 
savings  depository  office  within  the  meaning  of  this  Act  and  to  be 
authorized    and    required    to    receive    deposits    of    funds    from    the 
public  and  to  account  for  and  dispose  of  the  same,  according  to  the 
provisions  of  this  Act  and  the  regulations  made  in  pursuance  thereof. 
Each  postal   savings  depository   office   shall   be   kept  open   for   the 
transaction    of    business    during    such    hours    as    the    Postmaster- 
General,  with  the  approval  of  the  board  of  trustees,  shall  direct. 

Who  may  open  Sec.  4.  That  accounts  may  be  opened  and  deposits  made  in 
accounts,  any  postal  savings  depository  established  under  this  Act  by  any 
person  of  the  age  of  ten  years  or  over,  in  his  or  her  own  name, 
and  by  a  married  woman  in  her  own  name  and  free  from  any 
control  or  interference  by  her  husband;  but  no  person  shall  at  the 
same  time  have  more  than  one  postal  savings  account  in  his  or  her 
own  right. 

Passbooks.  Sec.  5.  That  the  postmaster  at  a  postal  savings  depository 
office  shall,  upon  the  making  of  an  application  to  open  an  account 
under  this  Act  and  the  submission  of  an  initial  deposit,  deliver  to 
the  depositor  a  pass  book  free  of  cost,  upon  which  shall  be  written 
the  name  and  signature  or  mark  of  the  depositor  and  such  other 
memoranda  as  may  be  necessary  for  purposes  of  identification,  in 
which  pass  book  entries  of  all  deposits  and  withdrawals  shall  be 
made  in  both  figures  and  writing:  Provided,  That  the  Postmaster- 
General  may,  with  the  approval  of  the  board  of  trustees,  adopt 
some  other  device  or  devices  in  lieu  of  a  pass  book  as  a  means 
of  making  and  preserving  evidence  of  deposits  and  withdrawals. 


POSTAL   SAVINGS    BANK   ACT  233 

Sec.  6.     That  at  least  one  dollar,  or  a  larger  amount  in  multi-  Limitation  of 
pies  thereof,  must  be  deposited  before  an  account  is  opened  with  accounts. 
the  person  depositing  the  same,  and  one  dollar,  or  multiples  thereof,  Minimum. 
may  be  deposited  after  such  account  has  been  opened,  but  no  one 
shall  be  permitted  to  deposit  more  than  one  hundred  dollars  in  any  Maximum. 
one  calendar  month:     Provided,  That  in  order  that  smaller  amounts 
may  be  accumulated  for  deposit  any  person  may  purchase  for  ten 
cents   from   any   depository  office   a  postal   savings   card,   to  which 
may  be  attached  specially  prepared  adhesive  stamps,  to  be  known 
as  "postal  savings  stamps,"  and  when  the  stamps  so  attached  amount  Postal  savings 
to  one  dollar,  or  a  larger  sum  in  multiples  thereof,  including  the  stamps. 
ten-cent  postal  savings  card,  the  same  may  be  presented  as  a  deposit 
for  opening  an  account,  and  additions  may  be  made  to  any  account 
by  means  of  such  card  and  stamps  in  amounts  of  one  dollar,  or 
multiples  thereof,   and  when   a   card   and  stamps   thereto  attached 
are  accepted  as  a  deposit  the  postmaster  shall  immediately  cancel 
the  same.     It  is  hereby  made  the  duty  of  the  Postmaster-General 
to  prepare  such  postal  savings  cards  and  postal  savings  stamps  of 
denominations  of  ten  cents,  and  to  keep  them  on  sale  at  every  postal 
savings  depository  office,   and  to  prescribe  all  necessary  rules  and 
regulations  for  the  issue,  sale,  and  cancellation  thereof. 

Sec.  7.     That  interest  at  the  rate  of  two  per  centum  per  annum  Interest  on 
shall  be  allowed  and  entered  to  the  credit  of  each  depositor  once  in   deposits. 
each  year,  the  same  to  be  computed  on  such  basis  and  under  such 
rules  and  regulations  as  the  board  of  trustees  may  prescribe;  but 
interest  shall  not  be  computed  or  allowed  on  fractions  of  a  dollar; 
Provided,  That  the  balance  to  the  credit  of  any  one  person  shall  Maximum 
never    be    allowed    to    exceed    five    hundred    dollars,    exclusive    of  deposit,  $500. 
accumulated  interest.  * 

Sec.  8.  That  any  depositor  may  withdraw  the  whole  or  any  Withdrawal  of 
part  of  the  funds  deposited  to  his  or  her  credit,  with  the  accrued  deposits. 
interest,  upon  demand  and  under  such  regulations  as  the  board 
of  trustees  may  prescribe.  Withdrawals  shall  be  paid  from  the 
deposits  in  the  State  or  Territory,  so  far  as  the  postal  funds  on 
deposit  in  such  State  or  Territory  may  be  sufficient  for  the  purpose, 
and,  so  far  as  practicable,  from  the  deposits  in  the  community  in 
which  the  deposit  was  made.      No  bank  in  which  postal   savings 


234 N.    W.    HALSEY   &   CO. 

funds  shall  be  deposited  shall  receive  any  exchange  or  other  fees 

or  compensation  on  account  of  the  cashing  or  cancellation  of  any 

checks  or  the  performance  of  any  other  service  in  connection  with 

the  postal  savings  depository  system. 

Deposit  of        Sec.  9.     That  postal  savings  funds  received  under  the  provisions 

postal  savings   of  this  Act  shall  be  deposited  in  solvent  banks,  whether  organized 

funds  in  banks,    under  national   or   state   laws,   being   subject   to   national   or   state 

supervision    and   examination,    and   the   sums   deposited   shall    bear 

interest  at  the  rate  of  not  less  than  two  and  one-fourth  per  centum 

Interest  on    per   annum,   which  Tate   shall   be   uniform   throughout   the   United 

such  funds.    States     and     Territories     thereof;      but     five     per     centum     of 

such     funds    shall    be   withdrawn   by    the   board   of   trustees    and 

Reserve,    kept    with    the    Treasurer    of    the    United    States,    who    shall    be 

treasurer  of  the  board  of  trustees,   in  lawful  money  as  a  reserve. 

Bonds  available   The  board  of  trustees  shall  take  from  such  banks   such 

as  security  for   security    in   public    bonds    or    other   securities,    supported 

deposit  <of  savings   by  the  taxing  power,  as  the  board  may  prescribe,  approve, 

funds,   and   deem   sufficient   and  necessary   to   insure   the    safety 

and    prompt    payment    of    such    deposits    on    demand.* 

The  funds  received  at  the  postal  savings  depository  offices  in  each 

Funds  shall  be    city,   town,  village,   and  other  locality  shall  be  deposited  in  banks 

deposited  in  local    located  therein  (substantially  in  proportion  to  the  capital  and  surplus 

banks,    of  each  such  bank)  willing  to  receive  such  deposits  under  the  terms 

of  this  Act  and  the  regulation  made  by  authority  thereof,  but  the 

amount   deposited   in   any   one   bank  shall   at   no   time   exceed   the 

amount   of   the   paid-in   capital    and   one-half   the   surplus   of    such 

bank.     If  no  such  bank  exist  in  any  city,  town,  village,  or  locality, 

or  if  none  where  such  deposits  are  made  will  receive  su&i  deposits 

on  the  terms  prescribed,  then  such  funds  shall  be  deposited  under 

the  terms  of  this  Act  in  the  bank  most  convenient  to  such  locality. 

If   no  such  bank  in   any  State   or  Territory   is  willing   to   receive 

such    deposits   on    the    terms    prescribed,    then    the    same    shall    be 

deposited  with  the  treasurer  of  the  board  of  trustees,  and  shall  be 

counted  in  making  up  the  reserve  of  five  per  centum.     Such  funds 

Withdrawal  of    may   be   withdrawn    from   the   treasurer   of   said   board  of   trustees 

savings  bank    an<^  a^  °ther  postal  savings  funds,  or  any  part  of  such  funds,  may 

funds,    be    at    any    time    withdrawn    from    banks    and    savings    depository 

*See  note  page  243. 


POSTAL   SAVINGS    BANK   ACT  235 

offices  for  the  repayment  of  postal  savings  depositors  when  required 

for  that  purpose.     Not  exceeding  thirty  per  centum  of  the  amount 

of   such   funds   may    at   any    time   be    withdrawn   by    the   trustees 

for  investment  in  bonds  or  other  securities  of  the  United  States,  it 

being    the    intent    of    this    Act    that    the    residue    of    such    funds, 

amounting  to  sixty-five  per  centum  thereof,  shall  remain  on  deposit  Sixty-five  per  cent 

in   the   banks   in  each  State   and   Territory   willing  to   receive   the  a  working 

same  under  the  terms  of  this  Act,  and  shall  be  a  working  balance  balance. 

and  also  a  fund  which  may  be  withdrawn  for  investment  in  bonds 

or  other  securities  of  the  United  States,  but  only  by  direction  of 

the  President,  and  only  when,  in  his  judgment,  the  general  welfare 

and  the  interests  of  the  United  States  so  requires.      Interest   and 

profit   accruing   from   the   deposits   or   investment  of   postal   savings 

funds  shall   be   applied   to  the  payment  of  interest  due   to  postal 

savings  depositors  as  hereinbefore  provided,  and  the  excess  thereof, 

if  any,   shall  be  covered  into  the  Treasury   of  the  United  States 

as  a  part  of  the  postal   revenue:     Provided,   That  postal   savings 

funds  in  the  treasury  of  said  board  shall  be  subject  to  disposition 

as  provided  in  this  Act,  and  not  otherwise:     And  provided  further. 

That   the   board   of   trustees   may   at   any    time   dispose   of   bonds 

held   as  postal   savings   investments   and   use   the  proceeds   to  meet 

withdrawals  of  deposits  by  depositors.      For  the  purposes  of  this 

Act  the  word  "Territory,"  as  used  herein,  shall  be  held  to  include 

the  District  of  Columbia,  the  District  of  Alaska,  and  Porto  Rico, 

and  the  word  "bank"  shall  be  held  to  include  savings  banks  and 

trust  companies  doing  a  banking  business. 

Sec.    1 0.      That   any  depositor   in   a   postal   savings   depository  Surrender  of 
may  surrender  his  deposit,  or  any  part  thereof,  in  sums  of  twenty  deposits  in 
dollars,  one  hundred  dollars,  and  multiples  of  one  hundred  dollars  exchange  for 
and  five  hundred  dollars,  and  receive  in  lieu  of  such  surrendered  bonds. 
deposits,  under  such  regulations  as  may  be  established  by  the  board 
of  trustees,  the  amount  of  the  surrendered  deposits  in  United  States 
coupon  or  registered  bonds  of  the  denominations  of  twenty  dollars, 
one  hundred  dollars,   and  five  hundred  dollars,   which  bonds  shall 
bear  interest  at  the  rate  of  two  and  one-half  per  centum  per  annum, 
payable  semi-annually,   and  be  redeemable   at  the  pleasure  of   the 
United  States  after  one  year  from  the  date  of  their  issue  and  pay- 


236  N.    W.    HALSEY    &   CO. 

When  bonds  may   able  twenty  years  from  such  date,  and  both  principal  and  interest 
be  issued,    shall  be  payable  in  United  States  gold  coin  of  the  present  standard 
of  value:     Provided,   That   the  bonds   herein    authorized   shall   be 
issued  only  (first)  when  there  are  outstanding  bonds  of  the  United 
States  subject  to  call,  in  which  case  the  proceeds  of  the  bonds  shall 
be  applied  to  the  redemption   at  par  of  outstanding  bonds  of  the 
United  States  subject  to  call,   and   (second)    at  times  when  under 
authority  of  law  other  than  that  contained  in  this  Act  the  Govern- 
ment   desires   to   issue   bonds    for   the   purpose    of   replenishing    the 
Treasury,  in  which  case  the  issue  of  bonds  under  authority  of  this 
Act  shall  be  in  lieu  of  the  issue  of  a  like  amount  of  bonds  issuable 
under    authority   of    law   other    than    that    contained   in    this    Act: 
Provided  further,  That  the  bonds  authorized  by  this  Act  shall  be 
issued  by  the  Secretary  of  the  Treasury  under  such  regulations  as  he 
may  prescribe:     And  provided  further,  That  the  authority  contained 
in   section   nine   of   this  Act    for   the   investment  of   postal   savings 
funds  in  United  States  bonds  shall  include  the  authority  to  invest 
in    the    bonds    herein    authorized    whenever    such    bonds    may    be 
Bonds  shall  be  lawfully    issued:      And   provided   further,    That   the   bonds   herein 
exempt  from   authorized  shall  be  exempt  from  all  taxes  or  duties  of  the  United 
taxation.   States   as  well  as   from  taxation  in   any   form  by  or   under  state, 
Bonds  not  municipal,    or    local    authority:     And   provided   further,    That    no 
available  as  bonds  authorized  by  this  Act  shall  be  receivable  by  the  Treasurer 
security  for  °f  me  United  States  as  security  for  the  issue  of  circulating  notes 
circulation,  by  national  banking  associations. 

Investment  of        Sec.    1  1 .      That   whenever   the    trustees   of    the  postal    savings 

funds  in  United  fund    have    in   their   possession    funds    available    for    investment    in 

States  bonds  by  United    States    bonds    they    may    notify    the    Secretary    of     the 

trustees.   Treasury  of  the  amount  of  such  funds  in  their  hands  which  they 

desire   to   invest    in   bonds   of    the   United    States    subject   to   call, 

whereupon,   if  there   are   United  States  bonds   subject  to  call,   the 

Secretary   of    the   Treasury    shall   call    for   redemption    an    amount 

of  such  bonds  equal  to  the  amount  of  the  funds  in  the  hands  of 

the  trustees  which  the  trustees  desire  to  thus  invest,  and  the  bonds 

so  called  shall   be  redeemed   at  par   with   accrued   interest   at   the 

Treasury   of   the   United   Stales   on    and   after   three   months    from 


POSTAL   SAVINGS    BANK   ACT 237 

the  date  of  such  call,  and  interest  on  the  said  bonds  shall  thereupon 

cease:       Provided,    That    the    said    bonds    when    redeemed    shall 

be   reissued   at  par   to   the   trustees   without   change   in   their   terms 

as  to  rate  of  interest  and  date  of  maturity:     And  provided  further, 

That  the  bonds  so  reissued  may,  in  the  discretion  of  the  Secretary    Redemption  of 

of   the   Treasury,    be   called   for   redemption   from   the   trustees   in    such  bonds. 

like  manner  as  they  were  originally  called  for  redemption  from  their 

former  owners   whenever   there   are   funds  in   the   Treasury   of   the 

United  States  available  for  such  redemption. 

Sec.    12.      That  postal  savings   depository   funds  shall  be  kept    Amount  of 
separate   from   other   funds   by   postmasters   and   other   officers   and    individual  deposits 
employees   of   the  postal   service,   who   shall   be   held  to   the  same    not  to  be 
accountability    under    their    bonds    for    such    funds    as    for    public    disclosed. 
moneys;  and  no  person  connected  with  the  Post-Office  Department 
shall  disclose  to  any  person  other  than  the  depositor   the   amount 
of    any    deposits,    unless    directed    so    to    do    by    the    Postmaster- 
General.     All  statutes  relating  to  the  safe-keeping  of  and  proper   Accounting  for 
accounting    for    postal    receipts    are    made    applicable    to    postal    postal  savings 
savings  funds,  and  the  Postmaster-General  may  require  postmasters,    funds. 
assistant   postmasters,    and   clerks    at   postal   savings   depositories   to. 
give  any  additional  bond  he  may  deem  necessary. 

Sec.  13.  That  additional  compensation  shall  be  allowed  post-  Compensation  of 
masters  as  post-offices  of  the  fourth  class  for  the  transaction  of  postmasters. 
postal  savings  depository  business.  Such  compensation  shall  not 
exceed  one-fourth  of  one  per  centum  on  the  average  sum  upon 
which  interest  is  paid  each  calendar  year  on  receipts  at  such  post- 
office,  and  shall  be  paid  from  the  postal  revenues;  but  postmasters, 
assistant  postmasters,  clerks,  or  other  employees  at  post-offices  of 
the  presidential  grade  shall  not  receive  any  additional  compensation 
for  such  service. 

Sec.    1 4.      That  the  sum  of  one  hundred   thousand  dollars  is    Enabling  compen- 
hereby    appropriated,    out    of    any    money    in    the    Treasury    not    sation  to  carry 
otherwise  appropriated,   or  so  much   thereof   as   may  be  necessary,    out  act. 
to   enable    the    Postmaster-General    and    the    board    of    trustees    to 
establish  postal  savings  depositories  in  accordance  with  the  provisions 
of   this  Act,   including  the  reimbursement  of  the  Secretary  of   the 
Treasury  for  expenses  incident  to  the  preparation,  issue,  and  regis- 


238 N.    W.    HALSEY    &   CO. 

tration  of  the  bonds  authorized  in  this  Act;  and  the  Postmaster- 
General  is  authorized  to  require  postmasters  and  other  postal  officers 
and  employees  to  transact,  in  connection  with  their  other  duties, 
such  postal  savings  depository  business  as  may  be  necessary;  and 
he  is  also  authorized  to  make,  and  with  the  approval  of  the  board 
of  trustees  to  promulgate,  and  from  time  to  time  to  modify  or 
revoke,  subject  to  the  approval  of  said  board,  such  rules  and 
regulations  not  in  conflict  with  law  as  he  may  deem  necessary  to 
carry  the  provisions  of  this  Act  into  effect. 

Safeguards  for  Sec.  15.  That  all  the  safeguards  provided  by  law  for  the 
protection  of  protection  of  public  moneys,  and  all  statutes  relating  to  the 
deposits,  embezzlement,  conversion,  improper  handling,  retention,  use,  or 
disposal  of  postal  and  money-order  funds  and  the  punishments 
provided  for  such  offenses  are  hereby  extended  and  made  applicable 
to  postal  savings  depository  funds,  and  all  statutes  relating  to  false 
returns  of  postal  and  money-order  business,  the  forgery,  counter- 
feiting, alteration,  improper  use  or  handling  of  postal  and  money- 
order  blanks,  forms,  vouchers,  accounts,  and  records,  and  the  dies, 
plates,  and  engravings  therefor,  with  the  penalties  provided  in  such 
statutes,  are  hereby  extended  and  made  applicable  to  postal  savings 
depository  business,  and  the  forgery,  counterfeiting,  alteration, 
improper  use  or  handling  of  postal  savings  depository  blanks,  forms, 
vouchers,  accounts,  and  records,  and  the  dies,  plates,  and  engravings 
therefor. 

Faith  of  United        Sec.    1 6.      That   the    faith    of   the    United    States   is    solemnly 

States  pledged  to  pledged   to   the   payment   of   the   deposits   made    in    postal   savings 

depositors,   depository  offices,  with  accrued  interest  thereon  as  herein  provided. 

Decree  or  order        Sec.    1 7.      That   the   final   judgment,   order,   or  decree  of   any 
of  court  having  court  of  competent  jurisdiction  adjudicating  any  right  or  interest  in 
jurisdiction  the  credit  of  any  sums  deposited  by  any  person  with  a  postal  savings 
snalt  be  accepted  depository  if  the  same  shall  not  have  been  appealed  from  and  the 
as  conclusive  title  tjme   for   appeal   has  expired    shall,   upon  submission   to  the   Post- 
io  deposits.  master-General  of  a  copy  of  the  same,   duly  authenticated  in  the 
manner  provided  by  the  laws  of  the  United  States  for  the  authenti- 
cation of  the  records  and  judicial  proceedings  of  the  courts  of  any 
State  or  Territory  or  of  any  possession  subject  to  the  jurisdiction 
of  the  United  States,  when  the  same  are  proved  or  admitted  within 


POSTAL   SAVINGS    BANK   ACT  239 

any  other  court  within  the  United  States,  be  accepted  and  pursued 
by  the  board  of  trustees  as  conclusive  of  the  title,  right,  interest,  or 
possession  so  adjudicated,  and  any  payment  of  said  sum  in  accord- 
ance with  such  order,  judgment,  or  decree  shall  operate  as  a  full 
and  complete  discharge  of  the  United  States  from  the  claim  or 
demand  of  any  person  or  persons  to  the  same. 

Approved,  June  25,    1910. 


INFORMATION  CONCERNING 

POSTAL  SAVINGS  BONDS 

ISSUED  JANUARY  I,  1913. 


DESCRIPTION    OF    POSTAL    SAVINGS    BONDS. 

1.  By  applying  on  or  before  December  2,  1912,  depositors  of 
the  Postal  Savings  System  may  exchange  the  whole  or  a  part  of 
their  deposits  for  United  States  registered  or  coupon  bonds  in 
denominations  of  $20,  $100,  and  $500,  bearing  interest  from 
January  1,  1913,  at  the  rate  of  2^  per  cent  per  annum,  payable 
semi-annually,  and  redeemable  at  the  pleasure  of  the  United  States 
after  one  year  from  the  date  of  issue,  both  principal  and  interest 
payable  twenty  years  from  that  date  in  United  States  gold  coin. 

2.  Postal  savings  bonds  are  exempt  from  all  taxes  or  duties  of 
the  United  States,  as  well  as  from  taxation  in  any  form  by  or 
under  state,  municipal,  or  local  authority. 

3.  Applications  for  the  conversion  of  deposits  into  bonds  on  Conversion 
January  1,  1913,  must  be  received  on  or  before  December  2,  1912,  of  deposits. 
by  the  postmaster  at  the  depository  office  where  the  certificates  were 

issued.  The  postmaster  will  supply  an  application  form,  which 
must  be  made  out  in  triplicate.  The  depositor  must  indorse  and 
surrender  with  his  application  postal  savings  certificates  covering 
the  amount  of  the  bonds  desired,  for  which  the  postmaster  will 
give  him  a  receipt.  The  bonds  will  be  issued  by  the  Secretary  of 
the  Treasury,  and  as  soon  as  they  are  ready  will  be  delivered  to 
the  applicants. 


240 N.    W.    HALSEY    &   CO. 

4.  The  conversion  of  deposits  into  bonds  at  a  date  less  than  one 
year  after  the  certificates  began  to  bear  interest  forfeits  interest  on 
the  deposits  as  in  the  case  of  withdrawal  for  any  other  purpose. 

5.  Postal  savings  deposits  converted  into  bonds  are  not  counted 
as  a  part  of  the  maximum  of  $500  allowed  one  depositor,  and 
there  is  no  limitation  on  the  amount  of  available  postal  savings 
bonds  which  may  be  acquired  finally  by  a  depositor.  The  exchange 
is  considered  as  taking  effect  on  January  1 ,  and  a  depositor  who 
has  applied  to  convert  into  bonds  all  or  part  of  the  maximum 
balance  of  $500  may  deposit  an  additional  amount  in  January, 
though  the  bonds  may  not  yet  have  been  delivered. 

6.  Postal  savings  bonds  can  be  procured  only  by  the  conversion 
of  postal  savings  deposits  and  will  not  be  issued  to  persons  who  are 
not  depositors.  They  may  be  sold  or  assigned  to  any  person, 
however,  by  the  holder,  and  when  a  registered  bond  is  assigned  a 
new  bond  will  be  issued  in  the  name  of  the  owner. 

Registered  and  7.  The  depositor's  application  must  indicate  whether  bonds  are 
coupon  bonds,  desired  in  registered  or  coupon  form.  Coupon  bonds  are  preferable 
for  a  depositor  who  intends  to  hold  them  for  a  short  time  only  and 
who  has  ample  facilities  for  their  safe-keeping.  These  bonds  are 
payable  to  bearer,  and  the  title  will  pass  by  delivery  without 
indorsement.  Interest  on  coupon  bonds  is  collected  by  means  of 
interest  coupons,  which  are  detached  by  the  holder  as  they  become 
due. 

Registered  bonds  are  preferable  for  persons  intending  to  hold 
them  for  a  considerable  period,  and  they  differ  from  coupon  bonds 
in  the  following  respects: 

(a)  They  have  inscribed  upon  their  face  the  names  of  the 
persons  to  whom  they  are  issued. 

(b)  They  are  payable  only  to  the  persons  to  whom  issued  or 
their  assigns. 

(c)  The  ownership  of  registered  bonds  can  be  transferred  only 
by  assignment  in  proper  form. 

Assignment        8.   Registered  bonds  are  assigned  by  the  use  of  a  form  printed 

of  bonds,    on    the    back,    properly    dated    and    acknowledged.       When    the 

assignment  is  made  by  mark,  it  must  be  witnessed  by  at  least  one 


POSTAL   SAVINGS    BANK   ACT 241 

person  other  than  the  officer  before  whom  it  is  made.  A  ledger 
account  is  opened  in  the  Treasury  Department  at  Washington  with 
each  holder  of  one  or  more  registered  bonds,  and  when  such  bonds 
are  assigned  they  should  be  transmitted  by  the  new  owner  to  the 
Secretary  of  the  Treasury  (Division  of  Loans  and  Currency)  for 
transfer  on  the  books  of  the  department.  Registered  bonds  cannot 
be  exchanged  for  coupon  bonds.  Coupon  bonds  may  be  converted 
into  registered  bonds,  without  charge,  at  the  request  of  the  holder. 

9.  Under  the  regulations  of  the  Treasury  Department  a  minor  Assignment 
cannot  assign  registered  bonds  without  the  consent  of  a  duly  &y  minors. 
appointed   guardian   or   trustee,   evidence   of  whose   authority  must 

be  submitted.  A  minor  has  the  right  to  convert  his  postal  savings 
certificates  into  registered  bonds,  but  if  he  should  desire  to  assign  the 
bonds  during  his  minority  he  must  comply  with  this  regulation. 
This  difficulty  does  not  exist  in  the  case  of  coupon  bonds,  which 
are  transferred  by  mere  delivery. 

10.  Interest  on  registered  bonds  is  paid  by  checks  drawn  at  the     Payment 
Treasury   Department   in   favor   of   the    registered   holder.      These     of  interest. 
checks  are  sent  by  mail  to  the  post-office  address  of  the  holder,  and 

the  holder  of  a  registered  bond  should  notify  the  Secretary  of  the 
Treasury  (Division  of  Loans  and  Currency)  of  any  change  in  his 
post-office  address  at  least  fifteen  days  before  the  interest  falls  due. 
Checks  for  interest  on  registered  bonds,  as  well  as  interest  coupons 
detached  from  coupon  bonds,  are  payable  on  presentation  at  the 
United  States  Treasury  or  at  the  office  of  any  assistant  treasurer 
of  the  United  States.  Interest  checks  and  coupons  covering  interest 
on  postal  savings  bonds  may  be  cashed  by  postmasters  under  the 
same  conditions  as  other  Government  paper. 

1 1 .  Payment  on  registered  bonds  that  have  been  lost  or  stolen    Bonds  lost 
may    be    stopped    by    notifying    the    Secretary    of    the    Treasury    or  destroyed. 
(Division   of   Loans   and   Currency)    at   Washington.      If   coupon 

bonds  are  lost  the  Government  does  not  undertake  to  protect  the 
owner  against  the  wrongful  holder,  but  recognizes  the  bearer  only. 
The  owner  has  recourse  only  to  such  means  as  he  could  use  to 
recover  any  other  valuable  property.  When  bonds,  either  registered 
or  coupon,  have  been  destroyed,  wholly  or  in  part,  or  defaced,  a 


242 


N.    W.    HALSEY    &   CO. 


claim  may  be  filed  with  the  Secretary  of  the  Treasury  under  certain 
prescribed  conditions  for  their  replacement.  Such  claims  will  not 
be  allowed  for  coupons  which  have  been  detached  from  coupon 
bonds. 


Ownership. 


Purchase  fcp 
board  of  trustees. 


12.  United  States  bonds  are  issued,  transferred,  and  redeemed 
under  such  regulations  as  the  Secretary  of  the  Treasury  may 
prescribe.  Requests  by  holders  for  additional  information  after  the 
delivery  of  the  bonds  should  be  addressed  to  the  Secretary  of  the 
Treasury  (Division  of  Loans  and  Currency),  Washington,  D.  C. 

1 3.  On  the  application  of  any  holder  the  board  of  trustees  will 
purchase  postal-savings  bonds  at  par.  Registered  bonds  sent  to 
the  board  for  purchase  must  be  assigned  to  the  "Board  of  Trustees, 
Postal  Savings  System." 

Frank  H.  Hitchcock, 

Postmaster-General. 


POSTAL   SAVINGS    BANK   ACT  243 


NOTE. 

The    following    described    securities,    at    the    rates    respectively  Securities 
designated,  will  be  accepted  by  the  trustees  as  security  for  the  safety  acceptable. 
and  prompt  payment  on  demand  of  deposits,  viz.: 

a.  Interest-bearing  bonds  of  the  United  States,  bonds  issued  by 
the  Government  of  the  Philippine  Islands,  and  bonds  of  the  District 
of  Columbia  and  the  Government  of  Porto  Rico  will  be  received  at 
their  par  value. 

b.  Bonds  of  any  State  of  the  United  States  and  bonds  of  the 
Territory  of  Hawaii  will  be  received  at  90  per  cent  of  their  market 
value,  such  market  value  not  to  be  considered  as  exceeding  par. 

c.  Bonds  of  any  city,  town,  county,  or  other  legally  constituted 
municipality  or  district  in  the  United  States  which  has  been  in 
existence  for  a  period  of  ten  years,  and  which,  for  a  period  of  ten 
years  previous,  has  not  defaulted  in  the  payment  of  any  part  of 
either  principal  or  interest  of  any  funded  debt  authorized  to  be 
contracted  by  it,  and  whose  net  funded  indebtedness  does  not  exceed 
1 0  per  cent  of  the  valuation  of  its  taxable  property,  to  be  ascertained 
by  the  last  preceding  valuation  for  the  assessment  of  taxes,  will  be 
received  at  75  per  cent  of  their  market  value,  such  market  value  not 
to  be  considered  as  exceeding  par. 

No  deposit  of  bonds  for  less  than  one  thousand  dollars  will  be 
accepted,  nor  will  fractions  of  a  thousand  be  received.  The  board 
of  trustees  reserves  the  right  to  reclassify  the  securities  acceptable  for 
deposits  or  to  change  the  valuation  at  which  they  will  be  received. 
Under  no  circumstances  will  securities  other  than  those  above  set 
forth  be  acceptable. 


New  York  Savings  Bank  Law 


The  Banking  Laws  of  the  State  of  New  York  Relative 
to  Securities  in  Which  Deposits  in  Savings  Banks 
May  Be  Invested,  Corrected  to  and  Including 
1910-1911   Sessions. 

Sec.    146.     The  trustees  of  any  savings  bank  may  invest  the   ]n  what  securities 
moneys  deposited  therein  and  the  income  derived  therefrom  only  as   deposits  may  be 
follows:  invested. 

1.  In  the  stocks  or  bonds  or  interest-bearing  notes  or  Bonds  of  the 
obligations  of  the  United  States,  or  those  for  which  the  United  States  and 
faith  of  the  United  States  is  pledged  to  provide  for  the  0f  the  District  of 
payment  of  the  interest  and  principal,  including  the  bonds  Columbia. 

of  the  District  of  Columbia. 

2.  In  the  stocks  or  bonds  or  interest-bearing  obligations  Bonds  of  state 
of  this  State,  issued  pursuant  to  the  authority  of  any  law  of  Nev>  York. 
of  the  State. 

3.  In  the  stocks  or  bonds  or  interest-bearing  obligations  Bonds  of 
of  any  State  of  the  United  States  which  has  not  within  the  states. 
ten  years  previous  to  making  such  investment   by   such 
corporation  defaulted  in  the  payment  of  any  part  of  either 
principal  or  interest  of  any  debt  authorized  by  the  Legisla 

ture  of  any  such  State  to  be  contracted;  and  in  the  bonds 
or  interest-bearing  obligations  of  any  State  of  the  United 
States,  issued  in  pursuance  of  the  authority  of  the  Legisla- 
ture of  such  State,  which  have,  prior  to  May  29,  1895, 
been  issued  for  the  funding  or  settlement  of  any 
previous  obligation  of  such  State  theretofore  in  default, 
and  on  which  said  funding  or  settlement  obligation  there 
has  been  no  default  in  the  payment  of  either  principal 
or  interest  since  the  issuance  of  such  funded  or  settlement 


246 N.    W.    HALSEY   &   CO. 

obligation,  and  provided  the  interest  on  such  funded  or 
settlement  obligation  has  been  paid  regularly  for  a  period 
of  not  less  than  ten  years  next  preceding  such  investment. 

Bonds  of  school      4.  In  the  stocks  or  bonds  of  any  city,  county,  town  or 

districts,  counties  village,  school  district  bonds  and  union  free  school  district 

and  municipalities  bonds  issued  for  school  purposes,  or  in  the  interest-bearing 

of  New  York-  obligations   of  any   city,   county,   town  or  village   of  this 

State,  issued  pursuant  to  the  authority  of  any  law  of  the 

State  for  the  payment  of  which  the  faith  and  credit  of  the 

municipality  issuing  them  are  pledged. 

Bonds  of  other  5.  In  the  stocks  or  bonds  of  any  incorporated  city 
municipalities  situated  in  one  of  the  States  of  the  United  States,  which  was 
of  the  United  admitted  to  Statehood  prior  to  January  1,  1896,  and  which, 
States,  since  January  1,  1861,  has  not  repudiated  or  defaulted 
in  the  payment  of  any  part  of  the  principal  or  interest 
of  any  debt  authorized  by  the  Legislature  of  any  such  State 
to  be  contracted,  provided  said  city  has  a  population  as 
shown  by  the  Federal  Census  next  preceding  said  invest- 
ment of  not  less  than  45,000  inhabitants,  and  was  incorpo- 
rated as  a  city  at  least  twenty-five  years  prior  to  the  making 
of  said  investment,  and  has  not  since  January  1,  1878, 
defaulted  for  more  than  ninety  days  in  the  payment  of 
any  part  either  of  principal  or  interest  of  any  bond,  note, 
or  other  evidence  of  indebtedness,  or  effected  any  com- 
promise of  any  kind  with  the  holders  thereof.  But  if,  after 
such  default  on  the  part  of  any  such  State  or  city,  the 
debt  or  security  in  the  payment  of  the  principal  or  interest 
of  which  such  default  occurred  has  been  fully  paid, 
refunded,  or  compromised  by  the  issue  of  new  securities, 
then  the  date  of  the  first  failure  to  pay  principal  or 
interest,  when  due,  upon  such  debt  or  security,  shall  be 
taken  to  be  the  date  of  such  default  within  the  provisions 
of  this  subdivision,  and  subsequent  failures  to  pay  instal- 
ments of  principal  or  interest  upon  such  debt  or  security, 
prior  to  the  refunding  or  final  payment  of  the  same,  shall 
not  be  held  to  continue  said  default  or  fix  the  time  thereof, 
within  the  meaning  of  this  subdivision,  at  a  date  later  than 


NEW   YORK   SAVINGS    BANK   LAW 247 

the  date  of  said  first  failure  in  payment.  If  at  any  time  the 
indebtedness  of  any  such  city,  together  with  the  indebted- 
ness of  any  district,  or  other  municipal  corporation  or 
subdivision  except  a  county,  which  is  wholly  or  in  part 
included  within  the  bounds  or  limits  of  said  city,  less  its 
water  debt  and  sinking  funds,  shall  exceed  7  per  centum  of 
the  valuation  of  said  city  for  purposes  of  taxation,  its 
bonds  and  stocks  shall  thereafter,  and  until  such  indebted- 
ness shall  be  reduced  to  7  per  centum  of  the  valuation  for 
purposes  of  taxation,  cease  to  be  an  authorized  investment 
for  the  moneys  of  savings  banks;  but  the  Superintendent 
of  Banks  may,  in  his  discretion,  require  any  savings  bank 
to  sell  such  bonds  or  stocks  of  said  city  as  may  have 
been  purchased  prior  to  said  increase  of  debt. 

6.     In    bonds    and    mortgages    on    unincumbered    real  Bonds  and 
property  situated  in  this  State,  to  the  extent  of  sixty  per  mortgages  on 
centum  of  the  value  thereof.     Not  more   than  sixty-five  real  estate. 
per  centum  of  the  whole  amount  of  deposits  shall  be  so 
loaned  or  invested.    If  the  loan  is  on  unimproved  and  un- 
productive real  property,  the  amount  loaned  thereon  shall 
not  be  more  than  forty  per  centum  of  its  actual  value. 
No    investment    in    any    bonds    and    mortgages    shall    be 
made  by  any  savings  bank  except  upon  the  report  of  a 
committee  of  its  trustees  charged  with  the  duty  of  investi- 
gating the   same,  who   shall  certify  to   the  value   of  the 
premises  mortgaged  or  to  be  mortgaged,  according  to  their 
best  judgment,  and  such  report  shall  be  filed  and  preserved 
among  the  records  of  the  corporation. 

Also  in  the  following  securities: 

(a)  The  first  mortgage  bonds  of  any  railroad  corpora-  Bands  of  railroad 
tion  of  this  State,  the  principal  part  of  whose  railroad  is  corporations  of 
located  within  this  State,  or  of  any  railroad  corporation  Nenf  York- 
of  this  or  any  other  State  or  States  connecting  with  and 
controlled  and  operated  as  part  of  the  system  of  any  such 
railroad  corporation  of  this  State,  and  of  which  connecting 
railroad  at  least  a  majority  of  its  capital  stock  is  owned 
by  such  a  railroad   corporation  of  this   State  or  in  the 


248 


N.    W.    HALSEY   &   CO. 


Payment  of 

interest  and 

dividends  on 

capital  stock 

has  been 

punctual. 


mortgage  bonds  of  any  such  railroad  corporation  of  an 
issue  to  retire  all  prior  mortgage  debt  of  such  railroad 
companies  respectively;  provided  that  at  no  time  within 
five  years  next  preceding  the  date  of  any  such  investment 
such  railroad  corporation  of  this  State  or  such  connect- 
ing railroad  corporation  respectively  shall  have  failed 
regularly  and  punctually  to  pay  the  matured  principal  and 
interest  of  all  its  mortgaged  indebtedness,  and  in  addition 
thereto  regularly  and  punctually  to  have  paid  in  dividends 
to  its  stockholders  during  each  of  said  five  years  an 
amount  at  least  equal  to  four  per  centum  upon  all  its 
outstanding  capital  stock;  and  provided  further,  that  at 
the  date  of  every  such  dividend  the  outstanding  capital 
stock  of  such  railroad  corporation,  or  such  connecting 
railroad  company  respectively,  shall  have  been  equal  to  at 
least  one-third  of  the  total  mortgage  indebtedness  of  such 
railroad  corporations  respectively,  including  all  bonds 
issued  or  to  be  issued  under  any  mortgage  securing  any 
bonds  in  which  such  investment  shall  be  made. 


Bonds  of  railroad 

corporations  of 

the  United 

States. 


*t^  T*  ^*  *P  *l*  *F  ^r  1*  *l*  *I* 

(e)  The  mortgage  bonds  of  any  railroad  corporation 
incorporated  under  the  laws  of  any  of  the  United  States, 
which  actually  owns  in  fee  not  less  than  five  hundred 
miles  of  standard  gauge  railway  exclusive  of  sidings, 
widiin  the  United  States,  provided  that  at  no  time  within 
five  years  next  preceding  the  date  of  any  such  investment 
such  railroad  corporation  shall  have  failed  regularly  and 
punctually  to  pay  the  matured  principal  and  interest  of 
all  its  mortgage  debt  and  in  addition  thereto  regularly 
and  punctually  to  have  paid  in  dividends  to  its  stock- 
holders during  each  of  said  five  years  an  amount  at 
least  equal  to  four  per  centum  upon  all  its  outstanding 
capital  stock;  and  provided  further  that  during  said  five 
years  the  gross  earnings  in  each  year  from  the  operations 
of  said  company,  including  therein  the  gross  earnings  of 
all  railroads  leased  and  operated  or  controlled  and  operated 
by  said  company,  and  also  including  in  said  earnings  the 


NEW   YORK   SAVINGS    BANK   LAW 249 

amount  received  directly  or  indirectly  by  said  company 
from  the  sale  of  coal  from  mines  owned  or  controlled  by 
it,  shall  not  have  been  less  in  amount  than  five  times  the 
amount  necessary  to  pay  the  interest  payable  during 
that  year  upon  its  entire  outstanding  debt,  and  the 
rentals  for  said  year  of  all  leased  lines,  and  further  pro- 
vided that  all  bonds  authorized  for  investment  by  this 
paragraph  shall  be  secured  by  a  mortgage  which  is  at 
the  time  of  making  said  investment  or  was  at  the  date 
of  the  execution  of  said  mortgage  (1)  a  first  mortgage 
upon  not  less  than  seventy-five  per  centum  of  the  railway 
owned  in  fee  by  the  company  issuing  said  bonds  exclusive 
of  sidings  at  the  date  of  said  mortgage  or  (2)  a  refunding 
mortgage  issue  to  retire  all  prior  lien  mortgage  debts  of 
said  company  outstanding  at  the  time  of  said  investment 
and  covering  at  least  seventy-five  per  centum  of  the  rail- 
way owned  in  fee  by  said  company  at  the  date  of  said 
mortgage.  But  no  one  of  the  bonds  so  secured  shall  be  a 
legal  investment  in  case  the  mortgage  securing  the  same 
shall  authorize  a  total  issue  of  bonds  which  together  with 
all  outstanding  prior  debts  of  said  company,  after  deduct- 
ing therefrom  in  case  of  a  refunding  mortgage,  the  bonds 
reserved  under  the  provisions  of  said  mortgage  to  retire 
prior  debts  at  maturity,  shall  exceed  three  times  the  out- 
standing capital  stock  of  said  company  at  the  time  of 
making  said  investment.  And  no  mortgage  is  to  be 
regarded  as  a  refunding  mortgage,  under  the  provisions 
of  this  paragraph,  unless  the  bonds  which  it  secures  mature 
at  a  later  date  than  any  bond  which  it  is  given  to  refund, 
nor  unless  it  covers  a  mileage  at  least  twenty-five  per 
centum  greater  than  is  covered  by  any  one  of  the  prior 
mortgages  so  to  be  refunded. 

(f)  Any  railway  mortgage  bonds  which  would  be  a  legal  Bonds  of  railroad 
investment  under  the  provisions  of  paragraph  (e)  of  this  corporations 
subdivision,  except  for  the  fact  that  the  railroad  corpora-  owning  less  than 
tion  issuing  said  bonds  actually  owns  in  fee  less  than  five  five  hundred 
hundred   miles   of   road   provided   that    during   five   years  miles  of  road. 
next  preceding  the  date  of  any  such  investment  the  gross 


250 N.    W.    HALSEY    fr   CO. 

earnings  in  each  year  from  the  operations  of  said  corpora- 
tion, including  the  gross  earnings  of  all  lines  leased  and 
operated  or  controlled  and  operated  by  it,  shall  not  have 
been  less  than  ten  million  dollars. 

Guaranteed  (g)  The  mortgage  bonds  of  a  railroad  corporation 
bonds,  described  in  the  foregoing  paragraphs  (e)  or  (f)  or  the 
mortgage  bond  of  a  railroad  owned  by  such  corporation, 
assumed  or  guaranteed  by  it  by  indorsement  on  said 
bonds,  provided  said  bonds  are  prior  to  and  are  to  be 
refunded  by  a  general  mortgage  of  said  corporation  the 
bonds  secured  by  which  are  made  a  legal  investment  under 
the  provisions  of  said  paragraph  (e)  or  (f) ;  and  provided, 
further,  that  said  general  mortgage  covers  all  the  real 
property  upon  which  the  mortgage  securing  said  under- 
lying bonds  is  a  lien. 

(h)  Any  railway  mortgage  bonds  which  would  be  a 
legal  investment  under  the  provisions  of  paragraphs  (e)  or 
(g)  of  this  subdivision,  except  for  the  fact  that  the  railroad 
corporation  issuing  said  bonds  actually  owns  in  fee  less 
than  five  hundred  miles  of  road,  provided  the  payment  of 
principal  and  interest  of  said  bonds  is  guaranteed  by 
endorsement  thereon  by,  or  provided  said  bonds  have  been 
assumed  by  a  corporation  whose  first  mortgage,  or  refund- 
ing mortgage  bonds,  are  a  legal  investment  under  the 
provisions  of  paragraph  (e)  or  (f)  of  this  subdivision.  But 
no  one  of  the  bonds  so  guaranteed  or  assumed  shall  be  a 
legal  investment  in  case  the  mortgage  securing  the  same 
shall  authorize  a  total  issue  of  bonds  which,  together 
with  all  the  outstanding  prior  debts  of  the  corporation 
making  said  guarantee  or  so  assuming  said  bonds,  includ- 
ing therein  the  authorized  amount  of  all  previously 
guaranteed  or  assumed  bond  issues,  shall  exceed  three 
times  the  capital  stock  of  said  corporation,  at  the  time  of 
making  said  investment. 

Underlying       (j)  The  first  mortgage  bonds  of  a  railroad,  the  entire 

bonds,  capital  stock  of  which,  except  shares  necessary  to  qualify 

directors,  is  owned  by,  and  which  is  operated  by  a  railroad 


NEW   YORK   SAVINGS    BANK   LAW  251 


whose  last  issued  refunding  bonds  are  a  legal  investment 
under  the  provisions  of  paragraphs  (a),  (e),  or  (f)  of  this 
subdivision,  provided  the  payment  of  principal  and  interest 
of  said  bonds  is  guaranteed  by  endorsement  thereon  by 
the  company  so  owning  and  operating  said  road,  and 
further  provided  the  mortgage  securing  said  bonds  does 
not  authorize  an  issue  of  more  than  twenty  thousand 
dollars  in  bonds  for  each  mile  of  road  covered  thereby. 
But  no  one  of  the  bonds  so  guaranteed  shall  be  a  legal 
investment  in  case  the  mortgage  securing  the  same  shall 
authorize  a  total  issue  of  bonds,  which  together  with  all 
the  outstanding  prior  debts  of  the  company  making  said 
guarantee,  including  therein  the  authorized  amount  of  all 
previously  guaranteed  bond  issues,  shall  exceed  three  times 
the  capital  stock  of  said  company,  at  the  time  of  making 
said  investment. 

Bonds  which  have  been  or  shall  become  legal  invest- 
ments for  Savings  Banks  under  any  of  the  provisions  of 
this  section  shall  not  be  rendered  illegal  as  investments, 
though  the  property  upon  which  they  are  secured  has  been 
or  shall  be  conveyed  to  another  corporation,  and  though 
the  railroad  corporation  which  issued  or  assumed  said 
bond  has  been  or  shall  be  consolidated  with  another  rail- 
road corporation,  if  the  consolidated  or  purchasing  cor- 
poration shall  assume  the  payment  of  said  bonds  and 
shall  continue  to  pay  regularly  interest  or  dividend  or 
both  upon  the  securities  issued  against,  in  exchange  for 
or  to  acquire  the  stock  of  the  company  consolidated  or 
the  property  purchased  or  upon  securities  subsequently 
issued  in  exchange  or  substitution  therefor  to  an  amount 
at  least  equal  to  four  per  centum  per  annum  upon  the 
capital  stock  outstanding  at  the  time  of  such  consolidation 
or  purchase  of  said  corporation  which  has  issued  or 
assumed  said  bonds. 

Not  more  than  twenty-five  per  centum  of  the  assets  of   Limitation  of 
any  savings  bank  shall  be  loaned  or  invested  in  railroad   bond  holdings. 
bonds,  and  not  more  than  ten  per  centum  of  the  assets  of 
any  savings  bank  shall  be  invested  in  the  bonds  of  any 


252  N.    W.    HALSEY   &   CO. 


one  railroad  corporation  described  in  paragraph  (a)  of  this 

subdivision,  and  not  more  than  five  per  centum  of  such 

assets  in  the  bonds  of  any  other  railroad  corporation.     In 

determining  the  amount  of  the  assets  of  any  savings  bank 

under  the  provisions  of  this  subdivision  its  securities  shall 

be  estimated  in  the  manner  prescribed  for  determining  the 

Street  railroad  per  centum  of  surplus  by  section  one  hundred  and  fifty- 

corporatiorts  four  of  this  act.     Street  railroad  corporations  shall  not  be 

not  railroad  considered   railroad    corporations   within    the    meaning    of 

corporations,   this  subdivision. 


NOTE. 

California       Under    the    provisions    of    Section    "3"    bonds    of    the 

bonds  legal  State  of  California  are  legal  investments  for   New   York 

for  investment  Savings  Banks.    Under  the  provisions  of  Section  "5"  bonds 

by  New  York  of  the  cities  of  San  Francisco,  Los  Angeles  and  Oakland 

Savings  Banks,  are    legal.      Under    the    provisions    of    Section    "6e,"    the 

Southern  Pacific  Railroad  First  Refunding  4  per  centum 

bonds  and  all  underlying  issues  are  legal. 


General  Index 


Page 

Index  to  Bank  Act  of  California  as  Amended 254 

Index  to  Public  Deposit  Acts  of  California 271 

Index  to  County  and  Municipal  Deposit  Act  of  California.  .    271 

Index  to  Investment  Companies  Act  of  California 272 

Index  to  National  Bank  Act  as  Amended 273 

Index  to  Code  of  the  District  of  Columbia 280 

Index  to  Revised  Sections  of  National  Bank  Act 281 

Index  to  Currency  Act  of  March  1 4,  1 900 282 

Index  to  Additional    Circulation   Act    (Emergency    Currency 

Act) 283 

Index  to  Postal  Savings  Bank  Act 284 

Index  to  Postal   Savings   Bonds    (Information  issued  Jan.  |, 

1913) 286 

Index  to  New  York  Savings  Bank  Law 286 


254  N.    W.    HALSEY    &   CO. 


Bank  Act  of  California  as  Amended. 

Section  Page 

Act — applicable  to  certain  corporations i  9 

Effective  when   147  102 

Title  of  1  9 

Action — against  bank,  reports  are  prima  facie  evidence 142  10 1 

Against  superintendent  of  banks 134-136  87-89 

Brought  under  bank  act,  jurisdiction  in 136b  96 

For  sale  of  real  estate,  when 54  41 

May  be  maintained  by  Superintendent  of  Banks  to  dissolve  bank. . .  135a  88 

Adjustment — of  investments  made  prior  to  this  act 145  101 

Administrator — deposits  by    51  40 

May  deposit  with  trust  company 91-92-93  70 

Trust  company  may  act  as 90  67 

Advertisement — building    and    loan    associations    not    to    advertise    as 

savings  banks  12  15 

Capital,  must  show  amount  paid  up 14  19 

For  deposits,  prohibited  when 12  15 

Liabilities  must  show  separate 14  19 

Of  banks,  how  regulated 28  30 

Of  merger   31a  32 

Of  sale  of  bank 31  31 

Agent — purchase  of  assets  of  bank,  by 42  37 

Sale  of  mortgage  to  bank  by 35  35 

Agreement — of  consolidation  must  be  filed 31a  32 

Sale  and  purchase 31  31 

Amendment — of  articles  of  incorporation  must  be  filed 8  13 

Amortization — of  bonds  by  savings  banks 61  54 

Annual  Report — copies  for  distribution 140  99 

Of  Superintendent  of  Banks  to  contain  what 140  99 

Appeal — from  order  of  Superintendent  of  Banks 134-136  87-88 

Appointment — of  appraisers  99  75 

Of  Special  Deputy  Superintendent  of  Banks 136  91 

Apportionment — of  capital  and  surplus  to  departments 23  26 

Of  capital  and  surplus  to  private  trust  business 90  67-70 

Articles  of  incorporation — as  affected  by  bank  act 145  101 

May  provide  for  departmental  banking 22  26 

Of  trust  company  90  67-70 

On  consolidation  or  merger 31a  32 

Violation  of,  by  banks  134-1353-136  87-88 


INDEX  255 


BANK  ACT  OF  CALIFORNIA— Continued 

Section  Page 

Assessment — failure  of  bank  to  pay 123  79 

Of  banks,  how  calculated 123  79 

Of  banks  for  state  banking  fund 123  79 

When  capital  stock  impaired 133  86 

Assets — how  may  be  reached  in  merger 31a  32 

Invested  in  bonds   36-46  36-38 

Of  banks,  relation  of  loans  thereto 44  38 

Of  departments  to  be  kept  separate 26  29 

Purchased  by  directors,  officers  and  employees 42  37 

Relation  of,  to  investments   36-46  36-38 

Relation  of,  to  loans  by  savings  banks 67  60 

Sale  and  purchase   31  31 

Shall  not  be  mingled  with  trust  funds 32  35 

Assignee — deposits  by  51-91-93    40-70-71 

Attorney — may  be  employed  in  liquidating 136  88 

Of  State  Banking  Department 121  78 

Auditor — Superintendent  of  Banks  shall  provide 124  80 

Bad  debts — compounding  of 136  88 

What  are  21a  26 

Balance — sale  of  stock  for  assessment 133  86 

Unclaimed   deposits    15  19 

Bank — annual  report  of  Superintendent  of  Banks 140  99 

Application  to  do  business 128  82 

Articles  of  incorporation  must  be  filed 128  82 

As  a  borrower  21a  26 

Bond  investment  limited  36  36 

Branch  office  9  13-14 

Capital   impaired    133  86 

Ceasing  business  must  take  what  action 136a  96 

Classified  as  to  capital  by  population 23  26 

Commercial,  Purposes  of  5  10 

Conducting  business  in  unsound  manner I34-I35a  87-88 

Considered  insolvent,  when   20  24 

Definition  of  2  9 

Departmental,  separate  books  to  be  kept 26  29 

Departmental,  shall  make  reports  separately 129  83 

Dissolution  of,  by  process  of  law 135a  88 

Examination  of,  by  court 136  88 

Examination  of,  once  a  year 124  80 

Examiner,  must  file  oath   125  81 

Failure  to  make  report,  penalty 138  88 

Failure  to  pay  assessment 123  80 


256  N.    W.    HALSEY    &   CO. 


BANK  ACT  OF  CALIFORNIA— Continued 

Bank — Continued                                                                                           Section  Page 

Foreign,  inspection  of  124  80 

Funds,  when  deposited  with  other  banks 43  38 

Impairment  of  capital   133-136  86-88 

In  liquidation,  names  posted 141  100 

Insolvent  condition  of,  failure  to  report 126  82 

Inspection  of,  by  Superintendent  of  Banks 124  80 

In  unsafe  condition 136  88 

Investment  in  bonds  limited 46  38 

Investments,  changed  to  conform  to  act 145  101 

Investments  in  own  stock  prohibited 34  35 

Liquidation  of,  by  Superintendent  of  Banks 136  88 

Loans  on  own  stock  prohibited 34  35 

May  apply  to  court  to  dissolve 137  97 

May  conduct  safe  deposit  department 30  31 

May  consolidate,  how 31a  33 

May  join  National  Reserve  Association 56  43 

May  purchase  real  estate,  when 61  45 

Must  liquidate,  when   136a  96 

Must  report  loans  to  directors 83  65 

Mutual,  may  have  capital  stock 29  30 

National,  examination  of  48  29 

Publication  of  report  of 132  85 

Publication  of  unclaimed  deposits  15  19 

Purchase   of    31  31 

Rights  of  creditors  in  merger 31a  32 

Sale  of   31  31 

Savings,  purposes  of   4  10 

Shall  not  own  stock  of  corporations 37  36 

Signs  must  show  business  conducted 28  30 

Stationery  must  show  business  conducted 28  30 

Stock,  as  collateral,  limited  44  38 

Trust  company,  purposes  of 6  10 

When  unsafe  to  continue  business 135a  88 

Banking  Association — state  banks  may  join 56  43 

Bills  of  exchange  or  lading — commercial  banks  may  buy  or  discount 80  63 

Not  construed  to  create  debt  55  43 

Bond — of  Deputy  Superintendent  of  Banks 121  78 

Of  Special  Deputy  Superintendent  of  Banks 136  91 

Of  Superintendent  of  Banks 120  78 

Bonds — available  for  deposit  by  trust  company 96  71 

Banks  limited  in  investing,  underwriting  or  guaranteeing 36-46  36-38 

Certified,  official  list  to  be  kept 61a  55 


INDEX  257 


BANK  ACT  OF  CALIFORNIA— Continued 

Bonds — Continued  Section  Page 

Cost  of  investigation  of 6ia        55 

For  deposits  by  court  order,  not  required 94          71 

Legal  as  investment  for  savings  banks 61          45 

Must  be  certified,  when 6i-6ia  45-55 

On  deposit  by  trust  company  to  draw  interest 96          71 

Power  of  Superintendent  of  Banks  to  investigate 61a        55 

Savings  banks  may  loan  on 67         60 

Borrowed  money — by  savings  banks  must  be  approved 62          56 

Commercial  banks  may  pledge  assets  for,  to  what  extent 21a        25 

Limit  on  amount  borrowed   21a        25 

Superintendent  of  Banks  may  extend  limit 21a        25 

Borrower — endorser  and  guarantor,  deemed  to  be 66         59 

Building  and  Loan  Associations — advertising,  how  restricted I2-I2a  16-17 

Capital — advertising  of,  must  show  what 14          19 

Apportioned  to  departments    23         26 

Assigned  by  foreign  corporations   7     10-12 

Impairment  of   133-136    86-89 

Increase  or  decrease  23          26 

Invested  in  bank  premises,  furniture  and  fixtures  and  safe  deposit 

vaults  61-84    45-66 

May  be  increased  by  surplus   21          25 

Must  bepaid  up  before  issuance  of  certificate 127         82 

Necessary  to  open  branch  office 9    13-14 

Of  commercial  bank,  relation  to  deposits 19         23 

Of  foreign  corporations  to  be  separate 7     10-12 

Of  savings  bank,  in  what  invested 61          45 

Of  savings  bank,  relation  to  deposits 19         23 

Of  trust  company,  how  invested 105          77 

Of  trust  company,  in  what  invested 105          77 

Paid  up  and  surplus  must  equal  what 19         23 

Re-apportionment  to  departments  23         26 

Relation  of  surplus  to  21          25 

Restriction  as  to  loans 80         62 

Capital    stock — as   collateral,    limited 44         38 

Assessed   when    133          86 

Banks  shall  not  invest  in  their  own 34         35 

Banks  shall  not  loan  on  their  own 34         35 

Commercial  bank,  amount  required   82          64 

Directors  must  hold  10          14 

May  be  sold  for  assessment 133          86 

Mutual  banks  may  issue,  how 29         30 

Of  title  insurance  company  doing  trust  business 106          77 


258  N.    W.    HALSEY    &   CO. 


BANK  ACT  OF  CALIFORNIA— Continued 

Capital  stock — Continued  Section  Page 

Paid  up  value  to  be  endorsed S3  41 

Par   value   must   be 53  41 

Reduction   of    55  43 

Required  according  to  classification   23-60-82  44-64 

Required  by  trust  company  go  67 

Savings  bank,  amount  required   60  44 

Certificate — issued  by  real  estate  corporations,  legality  for  savings  bank      61  45 

Necessary  before  transaction  of  business 24  29 

Necessary  for  new  department    24  29 

Of  deposit,  not  construed  to  create  debt 55  43 

Of  deposit,  savings  bank  may  issue 63  57 

Of  Special  Deputy  Superintendent  of  Banks  to  be  filed 136  91 

Of  Superintendent  of  Banks,  filing 128  82 

Of  Superintendent  of  Banks  in  merger 31a  32 

Of  Superintendent  of  Banks,  shall  be  issued  when 128  82 

Of  Superintendent  of  Banks  to  be  posted 50  40 

Of  Superintendent  of  Banks,  to  be  withheld,  when 127  82 

Of  Superintendent  of  Banks,  to  state  what 127  82 

Of  trust  company,  when  revoked 98  73 

Requisite    fee    24  29 

Certificate  of  deposit — bank  cannot  make  partial  payments  on 21a  25 

Certification — of  bonds  by  Superintendent  of  Banks 6i-6ia  45-55 

Of  Superintendent  of  Banks  not  to  obligate  the  State 61  45 

Certified  checks — issuance  unlawful,  when   52  40 

Must  be  immediately  charged   52  40 

City — bonds  of,  available  for  deposit  by  trust  company 96  71 

Legality  of  bonds  of 61  45 

Claims — against  bank  in  liquidation   136  93 

Objection  to,  liquidation  136  93 

Classification — of  banks    2  9 

Of  cities,  governed  by  Federal  census 23-60  26-44 

Of  cities  in  relation  to  capital  and  surplus 23-60-82    26-44-64 

Of  trusts    101  76 

Commercial  bank — advertising,  how  regulated 28  30 

Capital  and  surplus,  their  relation  to  deposits 19  23 

Capital  required    82  64 

Classified  as  to  capital  by  population 23  26 

Definition  of  5  10 

How  formed  to  conduct  3  9 

Loans  of,  limited  80-81  62-63 

Loans  to  corporation   81-83  63-65 

Loans  to  directors  and  employees 83  65 


INDEX  259 


BANK  ACT  OF  CALIFORNIA— Continued 

Commercial  bank — Continued  Section  Page 

Loan  to  officers  prohibited   83  65 

May  borrow  money  to  what  extent 21a  25 

May  pledge  assets  to  what  extent 21a  25 

Real  estate  loans  restricted  47  38 

Reserve    required    20  24 

Commercial  paper— commercial  banks  may  buy  or  discount 80  62 

Condition — must  be  published  132  85 

Consolidation — articles  of  incorporation  and  consolidation 31a  32 

How  assets  of  merged  banks  may  be  reached 31a  32 

Of  banks   31a  32 

Corporations — Consolidated   31a  32 

Doing  title  insurance  and  trust  business 107  78 

Loans  to  by  commercial  banks 81-83  63-65 

Loans  to,  by  savings  banks 65  58 

Mutual,  may  issue  capital  stock 29  30 

Sale  and  purchase   31  31 

Stock,  as  collateral,  limited  44  38 

Stock,  banks  shall  not  own  37  36 

Corporations,  banking — may  be  departmental  business,  when 22  26 

Must   file  certain  papers    8  13 

Corporations,  foreign — as  fiscal  agents   90  67 

Cannot  exercise  powers  of  trust  company 7  10 

May  act  as  executor,  when  7  10 

Shall  not  act  as  trustee   90  67 

Costs — in  liquidation   136  89 

County — bonds  of,  available  for  deposit  by  trust  company 96  71 

Legality  of  bonds  of  61  45 

County  deposits — in  savings  banks   62  56 

Creditors — rights  of,  against  banks  sold 31  31 

Rights  of  in  liquidation   136  93 

Currency  Association — State  banks  may  join   56  43 

Debt — savings  banks  shall  not  contract  except 62  56 

Deceased  depositors — when  moneys  due  to,  escheat 15  19 

Deeds  of  trust — legal  for  deposit  by  trust  companies 96  71 

Definition — of  bank    2  9 

Of  commercial  bank  5  10 

Of  "electrical  corporation"    61  49 

Of  "gas  corporation"  61  49 

Of  "pipe  line  corporation"  61  49 

Of   public    utility    61  49 

Of  savings  bank   4  10 

Of  "street  railroad  corporation"   61  49 


260  N.    W.    HALSEY    &   CO. 


BANK  ACT  OF  CALIFORNIA— Continued 

Definition  of  bank — Continued  Section  Page 

Of  "telegraph  corporation"    61  49 

Of  "telephone  corporation"   61  49 

Of  trust  company   6  10 

Of  "water  corporation"    61  49 

Departmental  banks — application  to  transact  23  26 

Apportionment  of  capital  and  surplus   61  45 

Assets  to  be  held  for  depositors,  how 27  30 

Assets  to  be  kept  separate   26  29 

Corporation  may  transact  business  of   22  26 

Departments  to  be  in  same  or  adjoining  buildings 26  29 

Investments,   how  held    27  30 

Statement  of  segregation  of  capital  and  surplus 23  26 

Deposit — by  administrator,  assignee,  executor,  guardian,  court  receiver, 

trustee  51  40 

In  National  bank  by  State  bank  48  39 

Of  Postal  Savings  in  savings  banks 62  56 

Of  trust  companies  with  State  Treasurer,  to  be  increased,  when...  98  73 

Of  trust  companies  with  State  Treasurer  to  consist  of  what 96  71 

Trust  companies  may  mortgage  premises  to  State  Treasurer,  when  97  73 

Depositary — National  bank  acting  as   48  39 

Depositor — contract  with,  in  savings  bank 64  57 

Deceased 15  19 

Repayment  of,  by  savings  banks 64  57 

Savings,  may  be  paid  by  draft 62  56 

Unknown   15  19 

Deposits — advertising  for,  prohibited  when   12  15 

Joint 16  21 

Lawful  reserve    20-64    24-57 

Must  not  be  increased,  when 19  23 

Not  construed  to  create  debt,  when 55  43 

Of  banks   43  38 

Of  deceased  persons,  how  collected 16  21 

Of  foreign  corporations  to  be  separate 7  10 

Of  married  women    16  21 

Of  minors    16  21 

Of  other  banks  with  savings  banks 68  61 

Of  savings  banks  with  other  banks  68  61 

Of  trust  company  may  be  withdrawn  from  State  Treasury 98  73 

Of  trust  company,  securities  may  be  exchanged 96  71 

Of  trust  company  securities,  title  and  appraisement 99  75 

Of  trust  funds   16  21 

Savings,  advertised  49  39 


INDEX  261 


BANK  ACT  OF  CALIFORNIA— Continued 

Deposits — Continued  Section  Page 

Savings  bank,  in  what  invested 61  45 

Savings  bank,  repayment  of   64  57 

State,  county  and  municipal  in  savings  banks 62  56 

Trust  company,  in  what  invested  106  77 

Unclaimed    15  19 

When    preferred    51-^2  40-56 

With  other  banks  by  departments  25  29 

With  trust  company,  authorized  by  court 91  70 

With  trust  company  by  administrator  91-92-93  7°~7l 

With  trust  company,  by  court  order 93  70 

Directors — eligibility  of  10  14 

Examination  of  bank  by   139  98 

Liability  for  fraud   38  36 

May  authorize  loans  to  directors,  agents  or  employees 83  65 

May  be  removed,  when   10  14 

May  declare  dividend,  when  21  25 

May  sell  no  bond  or  contract  to  bank,  when 35  35 

Must  hold  monthly  meetings    1 1  15 

Of  commercial  bank,  loans  to  83  65 

Of  savings  bank,  loans  to  prohibited  65  58 

Qualifications   of    10-1 1  14-15 

Shall  not  receive  commission  39  37 

Discount — banks   of    5  10 

On   bills   of   lading  or  bills   of   exchange,   or   commercial   paper, 

amount  of    80  62 

Dissolution — causes  for,  or  proceedings  in 136  88 

Dividends — directors  may  declare  under  what  conditions 21  25 

From  banks  in  liquidation   136  92 

Of  savings  banks,  how  restricted 64  57 

Trust  company  may  receive,  on  securities  deposited 96  71 

Draft — savings  depositors  may  be  paid  by  62  56 

Earnings — Disposition   of    21  25 

Electrical  corporation — definition  of   61  49 

Eligibility — of    directors    10  14 

Employees — liability  for  fraud   38  36 

May  sell  no  bond  or  contract  to  bank,  when 35  35 

Of  commercial  bank,  loans  to  83  65 

Of  savings  bank,  may  borrow  funds  65  58 

Shall  not  receive  commission   39  37 

Endorser — deemed  to  be  borrower,  when  66  59 

Entries — penalty  for  false   38  36 


262  N.    W.    HALSEY    &   CO. 


BANK  ACT  OF  CALIFORNIA— Continued 

Section  Page 

Examination — at  expense  of  bank,  when 138  98 

Of  banks  by  directors   139  98 

Of  national  banks    48  39 

Examiner — failure  to  report  insolvency  126  82 

Of  State  Banking  Department  121  78 

Shall  not  be  appointed  receiver,  when r  5  81 

Executor— deposits  by   5i~9i-93  40-70 

Foreign  corporation  may  act,  when  7  I0 

Trust  company  may  act  as   6-90  10-67 

Fee — for  appraisal  of  trust  company  securities 99  75 

For  branch  office    9  x4 

For  investigating  bonds    61a  55 

For  special  examination   124  80 

Filing — of  documents  preliminary  to  organization 8  13 

Of  proceedings  in  liquidation   136b  96 

Fiscal  agent — foreign  corporation  as 90  67 

Foreign  banks — inspection  of   124  80 

Foreign  corporations — see  Corporations — foreign 

Funds — of  State  Banking  Department  123  79 

Paid  out  on  court  order 137  97 

Furniture  and  fixtures — investment  in,  by  commercial  banks 84  66 

Investment  in  by  savings  banks    61  45 

Gas  corporations — definition  of   61  49 

Government — bonds  available  for  deposit  by  trust  company 96  71 

Legality  of  bonds  of  61  46 

Guarantee — of  banks  restricted    36  36 

Guardian— deposits  by   5I-9I-93    40-70-71 

May  collect  deposit,  when  16  21 

Trust  company  may  be,  for  estate   90  70 

Hypothecation — of  assets   21a  25 

Impairment — of  capital  stock   133-136  86-88 

Information — accessible  to  general  public  141  100 

For  public,  or  stockholders   17  22 

Injunction — against  Superintendent  of  Banks    134-136  87-88 

Insolvent — bank,  duties  of  Superintendent  of  Banks 136  88 

Upon  failure  to  restore  reserve  20  24 

Inspection — of  all  banks  once  a  year 124  80 

Interest — accrued  but  unpaid,  not  profits  when 45  38 

On  deposits  of  trust  funds   95  7i 

Inventory — liquidation  of  delinquent  banks    136  93 

Investigation — of  bonds  and  securities  by  Superintendent  of  Banks . . .  61a  55 

Of  fitness  of  stockholders   128  82 


INDEX 263 

BANK  ACT  OF  CALIFORNIA— Continued 

Section  Page 

Investments — bank  shall  not  invest  in  own  stock 34  35 

By  savings  banks  after  July  1,  1909,  legality  of 66  59 

Changed  to  conform  to  act,  how 145  102 

In  bonds  limited   36-46  36-38 

In  stock  of  corporations  prohibited  except  37  36 

Of  departments  held  for  depositors  27  30 

Of  trust  funds,  how  regulated    105  77 

Trust  company,  how  governed  106  77 

Irrigation  District  Bonds — legality  of   61  45-46 

Joint  deposits — savings  bank  deposit  in  name  of  two  or  more  persons..       16  21 

Judgment — dissolving  banks,  Superintendent  of  Banks  may  procure...     135a  88 

Jurisdiction — in  actions  brought  under  Bank  Act 136b  96 

Lawful  reserve — trust  funds  not  to  be  carried  as 32  35 

Legality — of  bonds  or  notes  for  savings  banks 61  45 

Letters  of  administration — certain  heirs  need  not  procure,  when 16  21 

Liabilities— advertising  to  be  separate   14  19 

Shall  not  be  increased,  when 20  24 

Liability — for  making  false  statement   38  36 

Of  directors,  officer  or  employees  for  fraud 38  36 

Of  stockholders  cannot  be  waived   40  37 

Life  insurance  companies — use  of  word  "trust"  by  foreign ?!f\...       12b  18 

Limit — "borrowed  money",  amount  of  21a  26 

Of  amount  of  real  estate  loans 47-67-105    38-60-77 

Of  deposit  liabilities    19  23 

Of  deposit  of  savings  banks  in  any  one  bank 68  61 

Of  investment  in  safe  deposit  department  30  31 

Of  loans  by  commercial  banks  47-8o  38 

Of  loans  by  savings  banks  66-67  59-60 

Of  loans  by  trust  companies  105  77 

Of  loans   on  bank  or  corporation  stock    44  38 

Of   purchase,    underwriting   or    guaranteeing   bonds    36  36 

Of   time   for   holding   real    estate    54  41 

On  deferred  payment  of  interest    21a  26 

Superintendent  of  Banks  may  extend,  on  money  borrowed  21a  26 

Liquidation — banks  in,   claims  against    136  88-93 

Banks  in,  names  to  be  posted 141  100 

Compensation  of  counsel  in   136  91 

Costs    in    136  92 

Of  banks,   voluntary    I36a-I37  96-97 


264  N.    W.    HALSEY    &   CO. 


BANK  ACT  OF  CALIFORNIA— Continued 

Section  Page 

Loans — Bank  shall  not  loan  on  own  stock  34  35 

By  commercial  banks,  how  limited  47-80-81  38-62 

By  commercial  banks,  to  officers,  directors  and  employees 83  65 

By    foreign    corporations    7  10 

By  savings  banks,  how  limited  66-67  59-60 

By    savings    banks,    prohibited,    when    68  61 

By  savings  banks,  renewal  of 66  59 

By  savings  banks  to  directors  or  officers  prohibited 65  58 

On  corporation  or  bank  stock  limited 44  38 

Real   estate    47  38 

Savings  banks,  effect  of  public  utilities  act  61  45 

Shall  not  be  increased,  when  20  24 

To  corporations,   directors  or  officers   interested    65-83  58-65 

To    directors    or    employees    65-83  58-65 

Trust  company,   how   governed    105-106  77 

When  savings  banks  must  not  make  new  64  57 

Location — Powers  as  affected  by  consolidation  of  cities    23-60-8226-44-64 

Losses — May  be  charged  to  surplus  when  21  25 

Reserve  fund  may  be  charged  with 64  57 

Shall    be    written    off    when    21a  25 

Meeting — Of  directors  once  a  month   11  15 

Members — Of   bank   may   make   application   to    dissolve    137  97 

Mining  Stock — Loans  on  by  savings  banks  prohibited  67  60 

Money — Amount  of  lawful  reserve  to  be  kept  on  hand   20  24 

Reserve    of    savings    banks    68  61 

Mortgage — Restriction  as  to   loans   on    47-67  38-60 

Municipal   deposits — In   savings  banks    62  56 

Mutual   bank — How   reserve   fund   shall   be   increased    64  57 

May   have   capital   stock    29  30 

Relation  of  reserve  fund  to  deposits 64  57 

Name— Restrictions  on   i2-i2a-i2b-l2c-49  16-18-39 

National  bank — Examination  of  as  depositary    48  39 

National    reserve    association — State   banks    may   join    56  43 

Notes — Legal    for   savings   banks,   when 61  45-49 

Officer— Liability  for   fraud    38  36 

May  sell  note,  bond  or  contract  to  bank,  when   35  35 

Of   bank,    loans    to    prohibited    65-83-10558-65-77 

Of  savings  bank,  shall  not  be  endorser   65  58 

Of  trust  company  entitled  to  knowledge  of  private  trusts   103  77 

Shall   not   receive    commission    39  37 

Overdraft — Limited  to   ninety  days  as   asset    21a  26 


INDEX  265 

BANK  ACT  OF  CALIFORNIA— Con  tinuc  d 

Section  Page 

Payment  of  deposits — By  savings  banks,  notice  required  when   64         57 

To  married  women,  or  to  minors   16         21 

Percentage — Of   reserve   required   by   savings    banks    68         61 

Personal   property — Savings   banks   may  loan  on    67         60 

Population — In  relation  to  capital  governed  by  Federal  census   23          26 

Postal   savings — Deposited   in   savings   banks    62          56 

Deposits  of  shall  not  be  construed  as  "borrowed  money" 21a        25 

Powers — Building   and   loan   associations,    restrictions    on    I2-I2a    16-17 

Of  banks   2-4-5-6      9-10 

Of   commercial   banks    5          10 

Of  savings  banks   4          10 

Of  trust  companies   6          10 

Preferred  claims — Deposits  by  order  of  court   51          40 

Deposits   of  postal   savings   as 62          56 

Deposits  of  public  moneys   as    62          56 

Preferred  creditors — Bank  shall  not  pledge  assets  except   21a        25 

Preferred   stock — Unlawful   for  banks    53         41 

Private  trust— Not  subject  to  inspection  of  Superintendent  of  Banks..  101          75 

Officers   entitled   to   knowledge   of    103          76 

Proceedings — In    dissolution    136-137    89-97 

In    liquidation,    filing    of    136b        96 

When  banks  are  merged 31a        32 

When   bank   sells   assets    31          31 

When  capital  of  bank  is  impaired   133          86 

When  reserve  falls  below  required  amount   20         24 

Profit  and  loss — Certain  debts  charged  off  to,  when  21a        26 

Profits — Accrued  but  uncollected  interest  not  to  be  included  in  45          38 

Public  administrator — May  deposit  with  any  bank,  when 51          40 

Public   moneys — Deposited   in   savings   banks    62         56 

Deposit  of,  shall  not  be  construed  as  "borrowed  money"    21a        26 

Public  utilities  act — Effect  on  loans  and  investments  by  savings  banks  61    45-49 

Public  utility — Bonds,  when  legal  for  savings  banks    61    45-49 

Definition    of    61          49 

Purchase — Of   assets   of  banks   by   officers,    directors,   etc 42         37 

Of  banks    31          31 

Railroad — Bonds,  when  legal  for  savings  banks    61    45-49 

Ratio — Of   capital   and   surplus   to   deposit   liabilities    19         23 

Of  reserve  to  deposit  liabilities   20-68-105    24-61-77 

Real  estate — Contract  not  to  be  sold  to  bank,  when  35          35 

Corporation  certificates,  when  legal   for  savings  banks    61    45-49 

Loans  on,  by  commercial  bank  47         38 


266  N.    W.    HALSEY    &•   CO. 


BANK  ACT  OF  CALIFORNIA— Continued 

Real  estate — Continued  Section  Page 

Loans  on,  by  savings  bank   67  60 

Mortgaged  as  deposit  by  trust  company  96  71 

Receiver — Bank  examiner  shall  not  act,  when   125  81 

Deposits  by    51  40 

Trust   company,    oath    required    go  67 

Report — Annual,  of  Superintendent  of  Banks  to  Governor    140  99 

Of  banks,  called  for  how  often   131  85 

Of  banks,   publication  of    132  85 

Of  banks  to  State  Banking  Department   130  83 

Of    examination    by    directors    139  98 

Special,   to    Superintendent   of   Banks    130a        85 

Trust  company  must  report,  what    98-101  73-75 

Reserve — For    departmental    bank    25  29 

Of  commercial  banks,  relation  to  deposits    20  24 

Of   savings   banks    68  61 

Of  savings  banks,   relation  to  deposits    19  23 

Required  for  commercial  banks    20  24 

Trust   company,   how   governed    106  77 

Reserve  fund — Mutual  savings  banks,  required   60  44 

Of  mutual  savings  bank,  may  be  used  how 64  57 

Revolving    fund — Superintendent   of   Banks   may   retain    123  79 

Safe  deposit  department — Any  bank  may  conduct 30  31 

Investment   in,   by   commercial   bank    84  66 

Investment  in,  by  savings  bank  61  45-49 

Investment    in,    by    trust    company    105  77 

Sale — Of   banks   or   departments    31  31 

Savings  bank — Advertising,  how  regulated 28  30 

Bonds  and  notes  when  legal  for  investment  61  45-49 

Capital   and    surplus,    their    relation   to    deposits    19  23 

Capital    stock    required    60  44 

Classified   as    to   capital   by   population    23  26-27 

Contracts    with    depositors     64  57 

Corporation   loans,   directors    or   officers    interested    65  58 

County   deposits   in    62  52 

Definition    of    4  10 

Deposits   of  other  banks   with    68  61 

Employees  or  agents  may  borrow  funds   65  58 

Investments,    effect   of   public   utilities    act    61  49 

Investments,    legality    of    66  59 

Loans,  effect  of  public  utilities  act   61  49 

Loans,  must  be  secured  how    67  60 

Loans  of,  limited   66  59 


INDEX  267 


BANK  ACT  OF  CALIFORNIA— Continued 

Savings  bank — Continued  Section  Page 

Loans  to  directors  and  officers  prohibited   65  58 

May  borrow  postal  savings  or  public  money 62  56 

May   issue   certificates   of   deposit    63  57 

Municipal  deposits  in   62  56 

Must  not  make  new  loans,  when   64  57 

Mutual  reserve  fund  of  must  be  increased,  when  64  57 

Mutual   reserve   fund,   when   required    60  45 

Only,  to  receive  savings  deposits 49  39 

Organized  without  capital   stock    60  44 

Purposes    of    4  10 

Reserve    required    68  61 

Shall   not  contract   debt  except    62  56 

Use   of  term   restricted    I2-I2a~49    16-17-39 

Without  capital  stock  reserve  fund  must  equal  what  19  23 

Savings  department — Investments  to  be   separate    26  29 

Savings  deposits — Advertising  for,  prohibited  when I2-I2a  16-17 

School  district — Bonds  of,  available  for  deposit  by  trust  company  ...  96  71 

Legality  of  bonds   of    61  46 

Securities — Certified,  official  list  to  be  kept   61a  55 

Cost  of  investigation  of    61a  55 

Deposited  by  trust  company,  examination  of  96-97-98-99  71-75 

Hypothecated   by   savings   bank    62  57 

Illegally  held  by  banks    145  101 

Security — Percentage,  for  savings  bank  loans   67  60 

Signs — Of  banks  must  show  what  28  30 

Special  report — Of  banks,  Superintendent  of  Banks  may  require 130a  85 

State — Law,   violated   by   banks    134-1353-136  87-88 

Legality  of  bonds  of  61  46 

Shall  be  responsible  for  securities  deposited  by  trust  company  . .  96  71 
State  banking  department — Assistants,  attorney,   chief  deputy,   exam- 
iner,  officials   of    121  78 

Created    120  78 

Examiner,  failure  to  report  insolvent  condition    126  82 

Fund    of    123  79 

Special   report   to    130a  85 

State  banking  fund — Amount  of    123  79 

State    deposits — In    savings    banks    62  56 

State  of  California — Bonds  of,  available  for  deposits  by  trust  company  96  71 

State  treasurer — Deposit  with,   by  trust  company    90  67 

May  accept  mortgage  on  trust  company  premises,  when   97  73 

Stationery— Of  banks  must  show  what  28  30 


268  N.    W.    HAUSEY    &   CO. 


BANK  ACT  OF  CALIFORNIA— Continued 

Section  Page 

Stock — As   collateral,  limited    44  38 

Impairment    of    133-136  86-88 

Investment  in,   prohibited    37  36 

Number  of  shares  held  by  directors  to  be  posted   17  22 

Preferred  prohibited    53  41 

Stockholders — Liability  of  cannot  be  waived    40  37 

May  elect  receiver,  when    136  95 

Meeting  of,  may  be  called  by  Superintendent  of  Banks   135  88 

Must   confirm  consolidation    31a        32 

Names   of  to  be  on   file    17  22 

Stockholders'   meeting — Superintendent  of  Banks  may  call    135  88 

Street  railroad  corporation — Definition  of  61  49 

Superintendent  of  Banks — Action  by,  to  procure  judgment  of  disso- 
lution      135a  88 

Annual   report  to   Governor    140  99 

Appointment  of   120  78 

Approval  of  capital   and  surplus   apportioned    23  26 

Authority   to   liquidate   bank    136  89 

Consent  necessary  to  do  departmental  business    23  26 

Liquidation  by    136    88-89 

May  appoint   special   deputies    136  91 

May  authorize  deposits  by  trust  company 96  71 

May  examine  national  banks,  when    48  39 

Official  reports  prima  facie  evidence   142  101 

Powers    of    124  80 

Power  to  investigate  bonds  and  securities    61a  55 

Reports    of   banks   to    130  83 

Shall  direct  discontinuance  of  unsound  practices    134  87 

Shall  give  notice  of  liquidation  proceedings  136  89 

Shall    not    inspect    private    trusts    101  75 

Shall  require  banks  to  repair  captial,  when   133  86 

Superior  court — As  to  conflicting  claims,  liquidation  of  banks    136  93 

Surplus — Maximum  necessary  to  maintain   21  25 

May  be  converted  into  capital    21  25 

Of  savings  bank,  in  what  invested    61    46-50 

Of  trust  company,   in  what  invested    105  yy 

One-tenth  of  net  profits  to  be  added  before  dividend  21  25 

Telegraph    corporations — Definition    of    61      49 

Telephone  corporations — Definition  of  61  49 

Title — Of  act   1  9 

To  accompany  mortgage  deposited  by  trust  company  99  75 


INDEX  269 
BANK  ACT  OF  CALIFORNIA— Continued 

Section  Page 

Title  insurance  company — Doing  trust  business 106-107  77-78 

Shall   not  conduct   commercial   or   savings   bank    22  26 

Transfer — Of  assets  and  liabilities  by  bank   31  31 

Trust  company — Additional  deposits  by,  to  be  authorized 98  73 

Additional    powers    dependant    upon    location    00  67 

Advertising,  how  regulated   28  30 

Articles  of  incorporation   90  67 

Capital  required  90  67 

Causes   for   dissolution    134-136  87-88 

Definition   of    6  10 

Departmental   business    106  77 

Deposits    by,    to   be    authorized    96  71 

Deposits    with,    how    secured    98  73 

Deposits    with    State   Treasurer    96-97-98-99  71-75 

Interest  or  dividends  on  securities  deposited  95  71 

Investment   of   trust    funds    94  71 

Lawful   reserve   of    105  77 

Liquidation    of    136  89 

May  withdraw  securities  from  State  Treasurer,  when 98  73 

Powers    of    6  10 

Private   trusts   confidential    103  76 

Purposes    of    6  10 

Restriction  on  investments   105  77 

Shall  pay  interest  on  deposits    .' 95  71 

Trust  funds,  meaning  of  term   98  73 

Trusts    classified    101  75 

Use   of  term   restricted    I2-I2a-I2b    16-17-19 

Trust  department — May  deposit  with  department  of  same  corporation      25  29 

Operated  by  title  insurance  company  106-107  77-78 

Trustee — Deposits  by   51  40 

Trust  funds — Deposits  of  16  21 

Interest  on,  as  provided  by  court   95  71 

Investments,  how  regulated    105  77 

Meaning  of  term   96  73 

Shall  not  be   counted   as   reserve    32  35 

Shall  not  be  mingled   32  35 

Trusts — How  classified    101  75 

Unclaimed   deposits — Publication   of    15  19 

Underwriting — Of  bonds   limited    36  36 

Undivided  profits — One-tenth  to  be  carried  to  surplus  before  dividend      21  25 

Shall  not  be  combined  with  surplus  in  advertising  14  ig 


270  N.    W.    HALSEY    &   CO. 


BANK  ACT  OF  CALIFORNIA— Continued 

Section  Page 
United  States — Bonds  available  for  deposit  by  trust  company 96  71 

Legality  of  bonds   of    61  46 

Violation — Of  any  law  of  State  134-1353  87-88 

Voluntary  liquidation — Of  banks       I36a-I37  96 

Warning — to  discontinue  violation  of  law   134         87 

Water   corporation — Definition   of    61  49 

Withdrawal — Of  savings  deposits,  coniditions  of  64         57 

Of  securities  by  trust  company 96-102    71-76 


INDEX 


271 


State  Deposit  Act 

Section  Page 

Act  of  1905  repealed 8  105 

Additional  security  may  be  required 3  104 

Bonds  which  may  be  used  as  security  for  funds  on  deposit 3  104 

Certificate  of  deposit  taken  by  state  treasurer  counted  as  cash 7  105 

Deposit  of  state  moneys  in  banks 1  103 

Deposits  subject  to  call I  103 

Expense  of  transporting  moneys  to  and  from  depositary  banks 1  103 

Indemnity  bonds  may  be  required   5  105 

Interest — rate  on  deposits   1  103 

Interest — when  payable   2  104 

Limitation   of  deposits    1  103 

Provisions  of  contract   4  104 

School  moneys  on  deposit   2  104 

Security   for   deposits    1  103 

Treasurer's  annual  statement  to  bank  4  104 

Treasurer  not  responsible  for  deposits   6  105 

Warrants  may  be  paid  by  certificates  of  deposit 7  105 

Value  of  bonds  deposited  as  security  3  104 


County  and  Municipal  Deposit  Act. 

Amount  that  may  be  deposited   5  107 

Bonds  required  as  security   1  106 

Counties  or  municipalities  may  buy  bonds  12  109 

Deposit  of  public  moneys,  other  than  state,  in  banks 1  106 

Expense  of  transportation  of  moneys  to  and  from  depositary  banks 10  109 

Interest  payable  quarterly   2  106 

Minimum  rate  two  per  centum   2  106 

On  failure  of  bank  to  repay,  security  to  be  sold 8  108 

Public  officials  not  responsible  for  deposits 9  108 

Rate  of  interest  to  be  fixed,  when 2  106 

Receipt  for  deposit    3  107 

Receipts  to  be  counted  as  cash 6  108 

Record  of  deposits   4  107 

Repeal  of  acts  in  conflict  13  109 

Value  of  bonds  deposited  as  security  1  106 

Violation  of  deposit  laws   II  109 


272  N.    W.    HALSEY    &   CO. 


Investment  Companies  Act. 

Section  Page 

Act    i  in 

Advertising     9  116 

Agent,    definition    of    2d  ill 

Appeal,  may  be  made  to  Superior  Court  12  117 

Application  for  permit  of  sale 4  112 

Appropriation     ; ; ; 24  120 

Appointment,  of  agent  7  115 

"Broker  Investment,"  definition  of   2c  ill 

Brokers,    reports    of    10b  117 

Commissioner,  of  Corporations,  duties  of   5  114 

Commissioner,    shall    employ    clerks,    deputies,    etc 17  119 

Commissioner,  location  of  office   18  119 

"Companies  Investment" — See  "Investment  Companies" 

Companies,    organized    in   other    States    4c  113 

Corporation  Commission  Fund    19  1 19 

Definition   of   "Investment    Companies"    2  in 

Definition   of   'Investment   Broker"    2c  1 1 1 

Definition  of  "Security"    2b  in 

Definition  of  "Agent"    .• . . . .  2d  in 

Deputies    17  1 19 

Duties  of,   Commissioner  of  Corporations    5  114 

Examination  fee 8  116 

Exemptions,   from  the  application   of  this   Act    3  112 

Exemptions,  of  Investment  Companies  and  securities   4b  113 

False  statements 13  118 

Fees     19  120 

Filing   fee    4a  112 

Filing,    reports   by   company   of   purchase   and   sales    10a  1 17 

Fines     15  118 

"Fund,    Corporation   Commission"    19  119 

General    Permit    necessary    6  115 

"Investment  Broker,"  definition  of   2c  in 

"Investment  Company,"  definition  of  2  in 

"Investment  Companies,"  under  control  of  Commissioner  8  116 

"Investment  Companies"  must  file  reports    10a  117 

Public  inspection,   reports   open  to    11  117 

Reports,  by  Commissioner  of  Corporations   21  120 

Reports,  Investment  Companies  must  file 10a  117 

Reports,  of  Brokers    10b  117 

Reports,  open  to  public  inspection    11  117 

Sale,  the  term    2e  112 


INDEX  273 


Section  Page 

Security,    definition    of    2b        111 

Superior  Court,  Appeal  may  be  made  to   12        117 

State  Corporation  Department,  created  16        118 

Violations    14        118 


National  Bank  Act  as  Amended. 

Act — national    bank    1  121 

Additional  Circulation  Act  217 

Amendments  to  articles  of  association  42  132 

Appointment — term  and  salary  of  Comptroller 3  121 

Articles  of  association    13  124 

Assessment  for  impairment  of  capital 115  160 

Assessment — provision  for  enforcement  of   116  160 

Associations  must  not  hold  their  own  capital  stock 111  159 

Bank  circulation   Chapter  III  135 

Bank  circulation — penalty  for  imitating  for  advertising  purposes 167  181 

Pledging 166  180 

Preparation    of    59  140 

Bank — closed   circulation   of    71  146 

Bank  may  enjoin  further  liquidation  proceedings 145  170 

Bank — proceedings  to  liquidate  must  be  brought  146  171 

Banks — liquidating  circulation  of   89  152 

National,    failed    160  176 

To  take  circulation  at  par  jy  148 

Whose  existence  has  expired   142  169 

Bonds — annual    examination   of    56  137 

Deposit  of  United  States   24  128 

Examination    of    55  137 

Exchange   of    51  136 

Forfeited  if  circulation  is  dishonored  144  170 

General  provisions  respecting   57  138 

Held  by  treasurer   52  136 

Notice  of  transfer  of  54  137 

Of   liquidating   banks    141  168 

Record  of  transfer  of  53  137 

Relation  of  bonds  deposited  to  capital   50  136 

Security   for  circulation    49  135 

Sold  at  private  sale  151  172 

Sold  at  public  auction   149  171 

United  States,  defined   48  135 


274  N.    W.    HALSEY    &   CO. 


NATIONAL  BANK  ACT— Continued 

Section  Page 

Capital — assessment  for  impairment  of    115  160 

Relations  of,  to  bonds  deposited   50  136 

Capital  stock — associations  must  not  hold  their  own in  158 

Amount    required    17  126 

Enforcing  payment  of  20  127 

Increase  of    43  133 

Payment    of    19  126 

Reduction   of    45  134 

Restoration   of    21  127 

Shares    of    18  126 

When  increase  becomes  valid   24  128 

Certificate  of  authority  25  128 

Organization   15  125 

Publication    of    26  129 

Officers  and  directors    23  128 

Certification  of  checks — false   177  185 

False,  penalty  for   178  185 

Certified  copies  of  organization  certificate  as  evidence 183  187 

Charter — forfeiture  of   157  174 

Circuit  courts  may  enjoin  Comptroller   180  186 

Circulation — amount    obtainable    58  139 

Banks  Chapter   III  135 

Of  extended  banks    69  145 

For  what  receivable   63  141 

Improper  use  of  bank   113  159 

Of  expired  banks,  penalty  for  issue  of 176  184 

Of  gold  banks   64  142 

Shall  bear  charter  number  of  bank   60  141 

Tax  on  Chapter  IV  148 

Clearing  house  certificates  counted  as  reserve 97  154 

Clerks  in  Comptroller's  office  7  I22 

Closed  bank — circulation  of   71  J46 

Comptroller  of  the  Currency   2  121 

Condition — reports   of    119  161 

Verification  of,  report  of  condition 120  162 

Consent  of  two-thirds  necessary  for  extension 132  166 

Contributions — corporation,  to  political  parties  prohibited 215 

Converted  bank  may  retain  branches  39  132 

Corporate  existence — extension  of Chapter  VI  165 

Powers    16  125 


INDEX  275 

NATIONAL  BANK  ACT— Continued 

Section  Page 

Counterfeit  circulation — penalty  for   169  181 

Penalty  for  dealing  in   175  184 

Penalty  for  improper   165  180 

Penalty  for  passing   172  183 

Creditor's  bill  against  shareholders   164  179 

Creditors — illegal  preference  of   163  179 

Crimes Chapter  VIII  180 

Currency  Act,  March  14,  1900 207 

Currency  bureau Chapter  I  121 

Delivering  circulation — penalty  for  improper   165  180 

Deposit  and  withdrawal  of  public  moneys  in  government  depositaries..  226  203 

By  certain  postmasters  in,  provision  for  government  depositaries..  227  203 

Not  required  for  consolidation  140  168 

Of  lawful  money  for  redemption  of  outstanding  circulation 139  168 

Of  United  States  bonds   24  128 

Depositaries — government    Chapter   XI  202 

Deputy    Comptroller    5  122 

Designation  and  duties  of  government  depositaries 225  202 

Directors — number  and  election  of 27  129 

Oaths  of    31  130 

Qualifications    of    28  129 

Vacancies  in  board  of  33  130 

Dissenting  shareholders  may  withdraw  135  166 

Dividends  by  national   banks 109  158 

Reports    of    121  162 

Unearned,    prohibited    114  159 

Earnings — reports    of    121  162 

Election — failure  to  hold  annual   32  130 

Qualifications  of  voters  at 30  130 

Enforcing  tax  on  circulation   83  150 

Evidence  182  187 

Examination  in  District  of  Columbia 128  164 

Examiners   125  163 

Compensation  of    127  164 

Qualification   for    126  163 

Existence — corporate Chapter  VI  165 

Extended  banks — circulation  of 69  145 

Extension  of  corporate  existence  Chapter  VI  165 

Failure  to  make  semi-annual  return  of  taxable  circulation 88  152 

First  lien  for  redeeming  circulation  150  172 

Fraudulent  notes  to  be  marked  79  148 


276  N.    W.    HALSEY    &   CO. 


NATIONAL  BANK  ACT— Continued 

Section  Page 

Gold  bank — conversion  of   36  131 

Organization  of   35  131 

Circulation   of    64  142 

Reserve    requirements    for 102  156 

Gold  certificates  counted  as   reserve 101  155 

Government  depositaries   Chapter  XI  202 

Impairment  of  capital — assessment  for 115  160 

Impressions  of  tools,  penalty  for  having 174  184 

Penalty  for  taking  unauthorized    173  183 

Indian  Territory — jurisdiction  in   185  187 

Insolvent  bank — distribution  of  assets  of 155  174 

Notes  to  creditors  of 154  173 

Taxes  unremitted    160  176 

Interest  by  Comptroller  in  national  banks  prohibited 6  122 

Interest — penalty   for   unlawful 108  158 

Which  may  be  charged  by  national  banks 107  157 

Issue  of  other  notes  prohibited 78  148 

Jurisdiction Chapter  VIII  180 

Lawful  money   231  206 

Laws  apply  to  all  national  banks 92  153 

Legal  tender  and  lawful  money 231  206 

Liabilities — exception  for  trustees,  etc 41  133 

Liability  of  directors   158  174 

Personal,   of  shareholders    40  132 

Restriction  on  banks   112  159 

Liquidating   banks,   circulation   of 70  146 

Liquidation  Chapter  VII  167 

Location — change    of    46  134 

Material  for  circulation — penalty  for  illegal  possession  or  use  of 171  182 

Money  order  funds — penalty  for  misapplication  of 228  204 

Mutilating  circulation — penalty  for  168  181 

National  bank  act  1  121 

National  bank  cases — jurisdiction  of 181  186 

National  banks — powers  and  organization  of Chapter  II  124 

Regulation  of  Chapter  V  153 

"National,"  use  of — in  titles  130  165 

Notice  to  present  circulation  for  redemption 148  171 

Uncurrent — prohibition    against    117  161 

United  States,  redemption  in  74  147 

Notice  of  voluntary  liquidation   138  168 

"Obligations  of  the  United  States"  defined 170  182 

Office  malfeasance — penalty  for  179  186 


INDEX  277 
NATIONAL  BANK  ACT— Continued 

Section  Page 

Offices,  vaults,  etc.,  Comptroller's  9  122 

Organization  and  power  of  national  banks Chapter  II  124 

Certificate   14  124 

Proceedings,  examination  of  22  127 

Organized  under  the  act  of  February  25,  1863 — status  of 47  135 

Penalty  for  failure  to  report 122  162 

For  unlawful  interest  charges   108  158 

Place  of  business   93  153 

Plates  and  dies — control  of  61  141 

Examination  of   62  141 

Pledging  United  States  notes — penalty  for 166  180 

Powers  and  organization  of  national  banks Chapter  II  124 

Powers — corporate   16  125 

President  shall  be  a  director 34  131 

Private  sale — bonds  sold  at  151  172 

Proceedings  in  default  of  tax  on  circulation 82  150 

Protest  of  bank  circulation   143  169 

Public  auction — bonds  sold  at 149  171 

Provisions  for  redeeming  circulation   66  143 

Qualifications  of  Comptroller   4  121 

Real  estate — dealings  of  national  banks  in 106  157 

Receiver — appointment  and   duties    152  172 

When  may  be  appointed 153  173 

When  he  may  purchase  property 159  175 

Receivership Chapter  VII  167 

Expenses   of — how  paid    156  174 

Redeemed  notes  to  be  cancelled 73  146 

Redemption  account — disposition  of   75  147 

Fund  counted  as  reserve 98  154 

Of  incomplete   circulation 76  147 

Of  circulation  in  United  States  notes 74  147 

Of  United   States  note  certificates 100  155 

Refunding  excess  tax  on  circulation 84  150 

Regulation  for  redemption  records 72  146 

Of  the  banking  business Chapter  V  153 

Report — annual,  of  Comptroller  10  123 

Reports  of  condition   119  161 

Of  condition,  verification  of 120  162 

Of  dividends  and  earnings 121  162 

Of  other  banks 123  162 

Penalty  for  failure  to 122  162 


278  N.    W.    HALSEY    &   CO. 


NATIONAL  BANK  ACT— Continued 

Section  Page 

Reserve — agents'  balances   counted  as 96  154 

Cities  94  153 

Clearing  house  certificates  counted  as 97  154 

Deposit  in  central  reserve  city 103  156 

Cities,    additional    104  156 

Not  maintained   95  154 

Redemption  fund  counted  as 98  154 

Requirements    94  153 

Requirements  for  gold  banks 102  156 

United  States  gold  certificates  counted  as 101  155 

United  States  note  certificates  counted  as 99  154 

Restrictions  on  liability 112  159 

On  loans no  158 

Savings  banks  in  the  District  of  Columbia Chapter  X  200 

Seal  of  Comptroller's  office 8  122 

Semi-annual   return   of   circulation 81  149 

Return  of  taxable  circulation 87  151 

Shareholders'    agent — appointment    qualifications    of 161  176 

Agents,   duties   of 162  178 

Dissenting,  may  withdraw    135  166 

Liability   40  132 

List  of 118  161 

Special  examination  necessary  for  extension 133  166 

State   banks — conversion   of 37  131 

Capital  of 38  132 

State  taxation  of  national  banks 124  163 

Status  not  changed  by  extension 134  166 

Suspension  of  business  after  default   147  171 

Suits  against  United  States  officers  or  agents 184  187 

Surplus  of  national  banks 109  158 

Tax  on  authorized  circulation 86  151 

Circulation Chapter  IV  148 

Circulation   of  converted  banks 89  152 

Circulation  provisions   restricted 90  IS2 

Taxation  of  national  banks  by  state 124  163 

Of   notes,   etc 91  152 

Title — change   of    46  134 

Trust  companies  in  the  District  of  Columbia Chapter  IX  188 

Unauthorized  deposit  of  public  moneys — penalty  for 229  205 

Receipt  or  use  of  public  money 229  205 

United  States  note  certificates  counted  as  reserve 99  154 

Use  of  "National"  in  titles     130  165 


INDEX 279 

NATIONAL  BANK  ACT— Continued 

Section  Page 

Violation  of  banking  law Chapter  VIII  180 

Visitorial  power — limitations  of  129  165 

Vote   required   for   liquidation 137  167 

When  circulation  is  exempt  from  taxation 85  150 

Withdrawing    circulation    67  144 

Circulation,  general  provisions  for 68  144 

Worn-out  or  mutilated  circulation 65  142 


280  N.    W.    HALSEY    &   CO. 


Code  of  the  District  of  Columbia 

Section  Page 

Amendment — provision   for    220  199 

By-laws    210  197 

Capital — increase  of   215  198 

Capital  stock — money  payments  of — required 207  196 

Provisions  relating  to   199  193 

Charter   188  189 

Filing   of    190  189 

Competent  to  act  as  trust,  etc 193  191 

Corporate  existence   198  193 

Directors'  liability  for  payment  of  unearned  dividends 211  197 

Liability  may  be  avoided   212  197 

Number  and  election  of 208  196 

Responsibility  of,  for  excess  liabilities 213  197 

District  court — all  similar,  subject  to  this  act 219  19$ 

Enforcement  of  subscriptions  to 200  194 

Evidence — certified  copy  of  incorporation  certificate  competent 216  198 

Jurisdiction,  district  supreme  court  has 218  198 

Larceny    204  195 

Liability  for  failure  to  report 203  195 

No  bond  or  other  security  required 217  198 

Notice  of  intention  to  apply  for  charter 189  189 

Officers — appointment  of    209  196 

Organization  certificate    187  188 

Perjury    204  195 

Powers 192  190 

Privileges  extended  to  existing  corporations 196  192 

Provisions    for   organization    186  188 

Qualifications    as    trustee 194  192 

Real    estate — dealings    in 197  193 

Report — annual  of  Comptroller  201  194 

Security  for  faithful  performance  of  trust 195  192 

Stock — interest  of   205  195 

Stockholders'   liability    206  196 

Supervision — under   Comptroller    191  190 

Tax  on  gross  earnings 202  194 

Trust  companies,  etc. — provisions  for  charter 189  189 

Trustee  not  liable  on  stock  assessment 214  197 

SAVINGS    BANKS,    ETC.— DISTRICT   OF   COLUMBIA 

Savings   banks  in — formation   of 221  200 

Examination  of,  by  Comptroller 223  201 

Reports  to  Comptroller  222  200 

Act  of  June  25,  1906,  relative  to 224  201 


INDEX 


281 


Index  to  Sections  of  Revised  Statutes  Included 
in  the  National  Bank  Act  as  Amended 


Section 

Paragraph 

Section 

Paragraph 

Section 

Paragraph 

Section 

Paragraph 

324 

2 

5136 

16 

5182 

63 

5220 

137 

325 

3 

5137 

106 

5183 

78 

5221 

138 

326 

4 

5138 

17 

5184 

65 

5222 

139 

327 

5 

5139 

18,42 

5185 

35,64 

5223 

140 

328 

6 

5140 

19 

5186 

102 

5224 

141 

329 

7 

5141 

20,21 

5187 

165 

5225 

70 

330 

8 

5142 

43,44 

5188 

167 

5226 

143 

331 

9 

5143 

45 

5189 

168 

5227 

144 

332 

128 

5144 

30 

5190 

93 

5228 

147 

333 

10 

5145 

27 

5191 

94,95 

5229 

148 

380 

184 

5146 

28 

5192 

96 

5230 

149,150 

605 

221 

5147 

31 

5193 

99 

5231 

151 

629 

180 

5148 

33 

5194 

100 

5232 

72 

713 

222,224 

5149 

32 

5195 

103 

5333 

73 

714 

222,224 

5150 

34 

5196 

77 

5234 

152 

736 

146 

5151 

40 

5197 

107 

5235 

154 

884 

182 

5152 

41 

5198 

108 

5236 

155 

885 

183 

5153 

225 

5199 

109 

5237 

145 

3410 

38 

5154 

37 

5200 

110 

5238 

156 

3411 

85 

5155 

39 

5201 

111 

5239 

157,158 

3414 

87 

5156 

47 

5202 

112 

5240 

j 125,126, 

3415 

88 

5157 

92 

5203 

113 

?  127 

3416 

89 

5158 

48 

5204 

114 

5241 

129 

3417 

90 

5159 

24,49 

5205 

115 

5242 

163 

3585 

231 

5160 

50 

5206 

117 

5243 

130 

3586 

231 

5161 

51 

5207 

166 

5413 

170 

3587 

231 

5162 

52 

5208 

177 

5415 

169 

3588 

231 

5163 

53 

5209 

179 

5430 

171 

3589 

231 

5164 

54 

5210 

118 

5431 

172 

3590 

231 

5165 

55 

5211 

119 

5432 

173 

3620 

226 

5166 

56 

5212 

121 

5433 

174 

3701 

91 

5167 

57 

5213 

122 

5434 

175 

3811 

11 

5168 

22,23 

5214 

80 

5437 

176 

3847 

227 

5169 

25 

5215 

81 

5488 

229 

4046 

228 

5170 

26 

5216 

82 

5497 

230 

513S 

13 

5172 

59 

5217 

83 

5134 

14 

5173 

61 

5218 

84 

5135 

15 

5174 

62 

5219 

124 

282  N.    W.    HALSEY    &   CO. 


Currency  Act  of  March  1 4,  1 900. 


Section  Page 

Amendment  to  section  5138,  R.  S 10  211 

Bimetallism — international    14  215 

Bonds — deposit  of,  to  secure  circulating  notes 12  213 

Issued  to  maintain  reserve  2  207 

Substitution    of    12  213 

U.  S.,  exchange  of  outstanding  issues  authorized 11  212 

Certificates — gold  6  209 

Gold,  when  authority  to  issue  is  suspended 6  209 

Silver,    denominations    7  211 

Coin — subsidiary  issue  of    8  211 

Coinage  of  silver  dollars 5  209 

Deposit  of  bonds  to  secure  circulating  notes 12  213 

Division  of  issue  4  209 

Division  of  redemption   4  209 

Dollar — gold,  standard  of  value 1  207 

Dollars — silver,  coinage  of,  to  retire  treasury  notes 5  209 

Gold  certificates    6  209 

When  authority  to  issue  is  suspended 6  210 

International  bimetallism    14  215 

Issues — division  of   4  209 

Legal  tender  quality  not  affected 3  208 

Notes — circulating,  additional  security  may  be  required  for 12  213 

Circulating,   denomination   of    12  213 

Circulating,  secured  by  deposit  of  bonds 12  213 

Circulating,  shall  not  exceed  paid-up  capital 12  214 

Circulating,   tax   on 13  215 

Reissued   2  208 

Treasury 2  207 

United  States,  amount  outstanding  fixed  by  law 6  209 

Redemption  of  treasury  notes   2  207 

Of  United   States  notes 2  207 

Reserve — maintenance  of   2  207 

In  trust  funds 4  209 

Redemption — division  of   4  209, 

Silver  certificates — denomination    7  211 

Dollars,    coinage    of 5  209 

Standard  of  value— gold  dollar 1  207 

Subsidiary  coin — issue  of 8  211 

Tax  on  circulating  notes 13  215 


INDEX 


283 


Additional  Circulation  Act. 
(Emergency  Currency  Act.) 

Section  Page 

Additional  circulation  act,  appropriations  to  carry  out 16  228 

Date  of  expiration  of  act 20  229 

Date   of  act 20  229 

Additional  circulation — application  for,  by  banks 1  217 

Application  for,  by  a  national  currency  association 3  221 

Deposit  of  securities  for   1  218 

Deposit  of  securities  for,  by  national  currency  association 3  221 

Distribution   geographically    7  224 

Information  regarding  securities  pledged  for 8  224 

Legal  title  of  bonds  as  security  for,  transferred 4  222 

Limit  of  indebtedness  of  municipality  in  proportion  to  balance  of 

taxable  property  3  222 

Limit  of  issue 5  223 

Limited  to  ninety  per  centum  of  cash  value  of  municipals     1-3  217-221 

Limited  to  seventy-five  per  centum  of  cash  value  of  commercial 

securities  I  219 

Not  to  exceed  thirty  per  centum  of  capital  when  based  on  com- 
mercial paper    1  219 

Redemption  fund  must  cover 6  223 

Reports,   monthly    9  225 

Securities  available  for 1  2i8 

Status  of   5  223 

Tax  on  9  225 

Value  of  securities  pledged  for 8  224 

Withdrawal  of  10  225 

Circulation — printing  of  notes    11  227 

Redemption  of  notes 12  227 

Tax  on 9  224 

Withdrawal   of  notes 10  226 

Commercial  paper — definition  of  I  219 

National   Currency   Association I  217 

A  bank  may  belong  to  but  one I  218 

Application  by,  for  additional  circulation 3  221 

By-Laws   of    I  218 

Capital   of    I  217 

Certificates   of    I  217 

Deposit  of  securities  for  additional  circulation 3  221 

Dissolution  of  members  of I  218 

Failure  of  member  to  deposit  additional  securities I  220 


284  N.    W.    HALSEY    &   CO. 


ADDITIONAL   CIRCULATION    ACT— Continued 

National  Currency  Association — Continued                                               Section  Page 

Failure  of  member  to  make  good  redemption  fund 2  220 

Substitution   of  securities 1  220 

Liability  of  member  of 1  219 

Management  of   1  218 

May  be  sued 1  217 

May  require  additional  securities 1  220 

Members  may  be  sued  in  circuit  court 1  220 

Membership  1  217 

Name  of 1  217 

Number  of  banks  required  to  form 1  217 

Officers  of   1  218 

Purposes    of    1  218 

Place  of  business 1  217 

Powers  of  board 1  218 

Receipt  given  for  bonds  deposited 4  222 

Sale  of  securities  deposited  by  members 2  220 

Under  authority  of  Secretary  of  Treasury 13  228 

National  Monetary  Commission,  creation  of 17  228 

Expiration  of       19  229 

To    report    18  228 

Public  deposits  14  228 

Interest   on    IS  228 


Postal  Savings  Bank  Act. 

Page 

Accounts — who  may  open    232 

Limitation   of    233 

Maximum     233 

Minimum    233 

Accounting — methods  of   237 

Appropriation — enabling    237 

Board  of  trustees — creation  of 231 

Reports   of    231 

Bonds — available  as  security  for  postal  savings  funds   234 

Exchange  of  deposits  for  235 

Exempt   from   taxation    236 

Investment  of  postal  savings  funds  in  U.  S 236 

Not  available  as  security  for  circulation    236 

Redemption    of    237 

When  they  may  be  issued  236 


INDEX 285 

POSTAL  SAVINGS   BANK  ACT— Continued 

Page 

Circulation — bonds   not  available   for    236 

Compensation   of  postmasters    237 

Deposits — court  decrees  determine  title  to   238 

Individual,  not   to   be   disclosed    237 

May  be   exchanged   for   bonds    235 

Protection  of 238 

Interest    on    233 

Of  postal  savings  funds  in  banks   234 

Withdrawal    233 

Faith  of  United  States  pledged  to  depositors    238 

Interest — on  deposits  of  postal  savings  funds  in  banks    234 

On  postal  savings  deposits   233 

Minimum    deposits    233 

Passbooks    232 

Postoffices — designation   of,   as   savings   depository   offices    232 

Postal  savings  stamps  233 

Postal  savings  funds — deposit  of,  in  local  banks   234 

Investment  of,   in  U.   S.  bonds    235 

Redemption  of  bonds  issued   for    237 

Withdrawal  of,  from  banks  234 

Working  balance    235 

Interest  on   234 

Reserve    234 

Bonds  available  as  security  for  deposit  of  234 

Postmasters — compensation   of    237 

Reports  of  board  of  trustees  231 

Stamps — postal    savings    233 

Safeguards   for  protection  of  postal  savings   bank   deposits    238 

Surrender  of  deposits  in  exchange  for  bonds   235 

Taxation — bonds    exempt    from    236 

Title — to    deposits    238 

How  proved  236 

Withdrawal  of  deposits   233 

Withdrawal  of  deposits  of  savings  bank  funds 234 


286 N.    W.    HALSEY    &  CO. 

Postal  Savings  Bonds 

(Information  issued  Jan.   1st,   1913) 

Section  Page 

Bonds,  assignment  of   8  240 

Bonds,  assignment  of  by  a  minor 9  241 

Bonds,  exempt  from  all  taxes 2  239 

Bonds,  lost  or  destroyed   11  241 

Bonds,  no  limit  to  amount  obtainable  by  depositor 5  240 

Bonds,  payment  of  interest  on 10  241 

Bonds,  procured  only  by  conversion  of  deposits  6  240 

Bonds,   Registered   and   Coupon    7  240 

Securities    Acceptable    Note  243 


New  York  Savings  Bank  Law. 

Bonds — limitation  of  holdings  of  railroad  bonds 6i  251 

Bonds  legal  for  investment. 

Of  United  States  1  245 

Of  District  of  Columbia 1  245 

Of  State  of  New  York I  245 

Of  counties  of  New  York   4  246 

Of  municipalities  of  New  York   4  246 

Of  school  districts  of  New  York   4  246 

Of  real  estate  in  New  York   6  247 

Of  various  states,  provided   3  245 

Of  municipalities  outside  of  New  York,  provided  5  246 

Of  railroad  corporations  of  New  York,  provided  6a  247 

Of  railroad  corporations  of  the  United  States,  provided   6e  248 

Of  railroad  corporations  owning  less  than  500  miles  of  road,  pro- 
vided    6f  249 

Of  railroad  corporations,  guaranteed,  provided  6g  250 

Of  railroad  corporations,  underlying,  provided  6i  250 

Street  railroad,  not  railroad  bonds   6i  252 

Mortgages  on  real  estate  6  247 


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